Glossary

Land Registry

Her Majesty's Land Registry is a non-ministerial government department created to register the ownership of land and property in England and Wales. It is one of the largest property databases in Europe.

Leasehold

There are two ways of owning land in England and Wales: Leasehold and Freehold. Leasehold means that the owner has a lease from the freeholder (landlord) to use the property for a number of years. Leases are usually long term – usually 90 to 120 years but sometimes as long as 999 years. The lease is the contract with the freeholder, which sets down the legal rights and responsibilities of both sides. Leaseholders normally pay an annual 'ground rent' to the freeholder and are responsible for paying maintenance fees, annual service charges and their share of the buildings insurance. The freeholder will normally be responsible for maintaining the common parts of the building (e.g. entrance hall and staircase) as well as the exterior walls and roof.

Lettable

A property capable of being rented (let) or leased.

Liquidity

Describes the degree to which an asset can be bought or sold in the market without affecting the asset’s price. Liquidity is characterised by a high level of trading activity. Assets that can easily be bought or sold are known as liquid assets (e.g. cash). It is safer to invest in liquid assets than illiquid assets since it is easier for an investor sell their investment.

Loan Investor

Lends money to the property owning SPV.

Loan To Value ('LTV')

The amount loaned to the SPV divided by the estimated value of the property. The lower the percentage is, the lower the perceived risk to the lender.

Example: Property value is £100,000, the loan is £50,000 secured against the property. £50,000 (loan) divided by £100,000 (value) equals 50%. Therefore the LTV is 50%.