UK property investment glossary
Every term a UK property investor or deal sourcer runs into, defined in one or two sentences. Where a term needs more than that, there is a full guide linked underneath it.
These are the definitions we use inside PropDetect when we calculate a figure, so they match what the software actually does rather than a generic textbook.
GDV (gross development value)
GDV is the price a property is expected to sell for once planned works are finished and it is in its final, marketable condition. It is the figure almost every other number in a refurbishment or development appraisal is worked back from.
Full guideBRRR (buy, refurbish, refinance, rent)
BRRR is a strategy where an investor buys a property below its post-refurbishment value, renovates it, refinances against the higher value to withdraw most of the original capital, and then rents it out. The aim is to end up owning a cash-flowing asset with little or none of the original deposit still tied up.
Full guideBMV (below market value)
BMV describes a property being sold for less than comparable evidence says it is worth, usually because the seller values speed or certainty over price. A genuine BMV deal has to be measured against sold comparables, not against the asking price.
Full guideGross yield
Gross yield is annual rent divided by the purchase price, expressed as a percentage. It ignores every cost, so it is useful only for a first-pass comparison between properties.
Full guideNet yield
Net yield is annual rent minus running costs, divided by the total cash invested including purchase costs, expressed as a percentage. It is the figure that tells you whether a rental actually pays.
Full guideROI (return on investment)
ROI is profit divided by the money you put in, expressed as a percentage. In property it matters which money: return on total cost and return on cash invested give very different answers on a leveraged deal.
Cash on cash return
Cash on cash return is annual net cash flow divided by the actual cash you put into a deal, including deposit, fees and refurbishment. It is the number that answers what your own money is earning.
Refurbishment cost
Refurbishment cost is the total spend to bring a property to its intended finished standard, covering room-by-room works, energy efficiency works, overheads such as scaffolding or a rewire, and a contingency. Estimating it from the property's actual condition rather than a flat rate per square metre is what separates a usable figure from a guess.
Full guideExit strategy
An exit strategy is how you intend to get your money back out of a deal: selling after refurbishment, refinancing and holding, or operating it as an HMO or serviced accommodation. The same property can fail on one exit and work on another, which is why a deal should be modelled on more than one.
HMO (house in multiple occupation)
An HMO is a property rented to three or more people from more than one household who share facilities such as a kitchen or bathroom. Larger HMOs need a licence, and many councils restrict new ones through an Article 4 direction.
Full guideArticle 4 direction
An Article 4 direction is a council order removing permitted development rights in a defined area, most commonly the right to convert a family home into a small HMO without planning permission. Buying inside one without checking is the most common way an HMO plan fails before it starts.
Full guideSDLT (stamp duty land tax)
SDLT is the tax paid on property purchases in England and Northern Ireland, charged in bands. Additional dwellings, including most buy to let purchases, carry a surcharge on top of the standard rates.
EPC (energy performance certificate)
An EPC rates a property's energy efficiency from A to G and is required to sell or let. It also records the floor area, which is what makes a price per square foot comparison possible.
Bridging finance
Bridging finance is short-term secured lending, typically for months rather than years, used to buy or refurbish a property before a sale or a longer-term mortgage repays it. It is priced monthly and carries arrangement, exit and valuation fees, so the holding period matters as much as the rate.
Full guideComparable (comp)
A comparable is a recently sold or let property used as evidence of what the subject property is worth. A good comparable matches on property type, bedroom count, floor area and proximity, and a valuation is only as defensible as the comparables behind it.
Price per square foot
Price per square foot is a sale price divided by the property's floor area. It is the standard cross-check on a comparable-based valuation, because it adjusts for the subject being larger or smaller than the properties it is being compared to.
LTV (loan to value)
LTV is the loan amount as a percentage of the property's value. It sets how much deposit is needed and, on a refinance, how much capital can be withdrawn.
DSCR (debt service coverage ratio)
DSCR is rental income divided by mortgage payments. Buy to let lenders use a version of it, often requiring rent to cover 125 to 145 percent of a stressed interest payment, and it is frequently the constraint that decides how much can be borrowed.
Void period
A void period is time when a rental property sits empty and earns nothing while costs continue. Modelling a realistic void allowance is what stops a projected yield from being optimistic.
Sourcing fee
A sourcing fee is what a deal sourcer charges an investor for finding and packaging a deal. Charging one in the UK requires being registered with a redress scheme, holding client money protection where relevant, and meeting anti money laundering obligations.
Full guideR2SA (rent to serviced accommodation)
R2SA is renting a property on a long-term lease and operating it as short-stay serviced accommodation, keeping the difference between the nightly income and the rent and running costs. It needs the landlord's written permission and the right insurance.
SSTC (sold subject to contract)
SSTC means an offer has been accepted but contracts have not exchanged, so the sale is not legally binding. SSTC listings are useful as evidence of achievable price but are not usually available to buy.
Deal pack
A deal pack is the document a sourcer sends an investor to present a deal: the property, the numbers, the refurbishment schedule, the comparable evidence and the projected return on each exit. A pack that shows its evidence is far easier to raise money against than one that shows only conclusions.
Maximum offer price
The maximum offer price is the highest price you can pay and still hit a target return, worked backwards from the end value, the refurbishment cost and the finance costs. On a deal that does not stack at the asking price, it is the number that turns a no into a negotiating position.
Last reviewed 4 September 2026.