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Peppercorn Rent

Peppercorn rent is a term given to a nominal amount paid to rent a property. This means the landlord does not receive a payment each year in cash. The terms of a lease state that some form of rental payment must be made. However, there are situations whereby the owner of the land or property concerned does not wish to charge a person any notable amount in rent. Since something must be paid, a nominal sum is chosen to fulfil the terms of the lease.

The name originally came from landlords who charged tenants one peppercorn (yes, a real one) for the rental price of the property. Today, most peppercorn rents will stipulate a sum of money, i.e. £1, to ensure the terms of the lease are met. However, token rents can also be requested, such as the original peppercorn that led to the name.

The payment may not be worth much, but it serves the role of establishing the existence of the lease. This means both parties will be subject to the terms of the lease. The payment covers the ground rent for the property, which today may be worth any amount of money. The rent covers the upkeep of the property while being rented to the tenant. If the landlord decides that only a nominal payment is required, this would be termed a peppercorn rent. It does not need to be £1, but it should be small enough to warrant the term being used. If £50 was charged, it would likely not be referred to as such.

 



Planning Permission

Planning permission must be sought from the local planning authority for any new building someone wishes to construct. The local planning authority is typically part of the local council for that area. Permission also covers engineering operations and the change of use of a building if it is in the public’s interest. An example would be changing a shop into a residential property, as this would be termed a change of use.

There are several types that could be sought in this case:

Outline planning permission (seeking permission in basic terms to see if planning would be approved) Full planning permission (sought by presenting a detailed plan of the proposed project) Retrospective planning permission (sought if someone has already made changes to their property that required planning permission, and did not make the proper application)
There are also different types of planning consent that are sought in relation to listed buildings, householder consent, and even those relating to Tree Preservation Orders.

It is up to the builder, homeowner, or other person seeking to build new properties or make changes to existing properties to get the planning permission they require. Certain changes are deemed to be fine under permitted development rules. This means you can do certain things to your home without needing permission (unless you live in a listed building).

For any development you have in mind, it is always best to check and see whether planning permission is required. If you do not seek it and you should have done, there is no guarantee that retrospective planning permission would be granted. If not, you might end up being ordered to return things to the way they previously were.

 



Premium

A premium is an amount of money paid to an insurer in exchange for being covered by one of their policies. The money is paid regularly, usually monthly or annually, for the policy cover. Typical examples of policies that require premiums to be paid are home insurance (contents or buildings insurance), car insurance, and health insurance.

Some companies charge slightly more for giving their customers the chance to pay by monthly direct debit rather than paying the whole amount upfront. This can make the total cost of the policy more affordable. Instead of paying a three-figure sum in one hit, the insurer allows the policyholder to pay a monthly premium. This includes a rate of interest in exchange for dividing the payments into 12 monthly amounts.

The premium is an important factor in working out which insurer to go to. You will receive certain benefits of cover in exchange for the premium. It is important to make sure the premium you pay covers you for the service you desire. It is common practice to agree to an excess on the policy. This is the amount you pay towards the loss before the insurance company picks up the rest. For example, an excess of £100 means you would meet the cost of £100 towards damages while the insurance company covers the rest. The higher the excess, the lower your premium will be, so this is an important element to think about. It is a good way to reduce the premium paid, although you should make sure you would be happy to meet the excess you choose – and could afford to do so.

 



Private Sale

This term relates to the sale of a property that takes place without the use of an estate agent. The whole process relating to selling the property, from placing adverts to hosting viewings and going through the sales process, is handled by the person selling the property, with no outside assistance from an estate agent.

There are pros and cons to taking this route. The biggest advantage for many is not needing to pay an estate agent any commission for making the sale. This means more cash is kept from the sale of the property, leading to a bigger profit for the seller. However, there are downsides too. The process of advertising, managing viewings, settling on an agreed price with a buyer, and so on, are all labour intensive and require a lot of time. You also need to use the services of a solicitor to make sure the contract for the sale is legally binding and ready to be signed by both parties. An alternative would be a conveyancer for handling this part of the process.

Many people would prefer to pay an estate agent rather than going down the private sale route. If you work long hours, for example, you may not have the time to handle viewings as well – viewings an estate agent could handle for you while you are at work. Think carefully before taking this route and consider whether the potential savings involved could outweigh the extra work you would need to do as the seller in this situation.

 



Product Fee

A product fee is sometimes attached to a mortgage when you make an application. The fee is paid to ensure the mortgage is reserved for you and to account for all the admin costs associated with the application. It is known by different terms as well, such as an arrangement fee or reservation fee, but regardless of terminology, all the terms mean the same.

The amount paid for a product fee does vary. You can expect to find fees ranging from around £1,000 to £1,500. Some lenders choose a £999 fee as psychologically it looks more appealing than one in four figures.

There are two ways you can pay the product fee connected to your mortgage. You can either pay the sum upfront or add it onto the amount you are borrowing for your home loan. One important factor to remember about the product fee is that it is rarely refundable. This means if the deal doesn’t go ahead or you back out of the mortgage or property purchase for some reason after paying the fee, you won’t get it back. Some lenders also deny a refund even if they turn down your application, since they have already put in some work going through the process of reviewing your application.

Hence why some buyers choose to add it onto the mortgage itself. This means you would still have the option to back out if needed, and you wouldn’t have paid the fee in advance. Do check the terms and conditions for the mortgage and the fee however, to make sure you know where you stand.

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