Definitions / Glossary

The total of the Purchase Price of the Preferred Home and the following
associated costs:
1. Stamp Duty Land Tax
2. Legal/Conveyancing fees
3. Registry fees, searches, chancel repair policy etc.
4. Survey fees
5. Valuation costs

The total market of all property investments made on behalf of our investors.

This means:
(i) the sale of the property at the end of the lease term or at any other time;
(ii) damage recoveries (but only to the extent that it is not applied toward property restoration);
(iii) receipts of insurance proceeds (other than rent insurance proceeds)

This is the difference between the Acquisition Costs (Purchase Price and associated
costs) and Disposal Proceeds (net of associated costs) of the Preferred Home.
A capital appreciation occurs if the Disposal Proceeds exceed the Acquisition Costs and a capital loss occurs if the Disposal Proceeds is less than the Acquisition Costs.

Tax charge levied on realised profit when an asset is sold or disposed. It’s calculated on any realised gains or an increase in asset value from acquisition to disposal for an asset held for more than one year.
It is applicable to shares, investment funds, second or inherited properties, sale of a business and valuables, etc.
For more information, visit https://www.gov.uk/capital-gains-tax

This is the net cash flow before tax (Net Operating Income less capital expenditure and any other costs) for a specific year, divided by the total equity amount invested in the property.

This is the total of your monthly or annual payments made on:
1. Unsecured loans - personal loans, buy now pay later loans, student loans, credit card loans, P2P loans etc.
2. Secured loans - car loans (hire purchase), business loans secured by personal assets etc.
3. Child and/or spousal maintenance

This is the proceeds generated from the sale of the Preferred Home to the tenant at the end of the agreement minus the following associated costs:
1. Estate Agent fees
2. Legal/Conveyancing fees
3. Energy Performance Certificate (EPC)
4. Capital Gains Tax

This is the period during which the Fund exits its property investments and distributes invested capital and profits to the investors. We anticipate this to commence at the end of Year 5 of the investment life cycle.

The amounts paid to our investors on a quarterly basis. This is calculated as Gross Rent minus deductions for:
1. Property-related costs (management fees, building & landlord insurance, ground rent, repair & maintenance and other service charges)
2. Capital expenditure
3. Asset Management fees paid to us for managing the Preferred Home, on behalf of the SPV owner. This includes frequent servicing and monitoring of the Home including rental collections, running bank accounts, reporting etc.
4. Administration fees paid towards SPV tax reporting & accounting audits, third-party professional costs incurred in running the SPV.

This is a measure of the Dividends paid to investors relative to the Purchase Price of the Preferred Home (plus purchase costs and taxes).

The ratio of:

(a) percentage of the market value of the home that tenant receives as deposit towards their purchase from us at the end of the lease term; to

(b) percentage of your total Principal Savings to the Purchase Price of the home at the start of the lease term.

This is the total of your monthly or annual payments for:
1. Utilities - electricity, gas and water.
2. Council Tax
3. TV license, internet & cable/satellite TV, mobile phone, gym membership,
4. Insurance - car, home & contents
5. Transport Costs - public transport (rail, tube and bus), car (maintenance, fuel, etc.)
6. Childcare Costs - school fees, educational trips, other curriculum activities.

This is the party appointed by the General Partner to carry out the daily operations of the Fund, including the evaluation of potential investment opportunities, providing advisory services to the property SPVs and managing the Fund’s audit and reporting processes. In exchange of its services, they will be paid a Management Fee.

This is the sum of remunerations (earnings) received by employees (your salary), income earned from self-employment, private pensions and investments, and cash benefits (such as state retirement pension, child benefits).

This is the period of capital-raising for the Fund, which is anticipated to take 24 months, with the first closing expected to be after 12 months.

This will be an entity set up by SuchHomes, which will be wholly responsible for setting up & managing the Fund and will have a fiduciary duty to act solely in investors’ interests. It will be responsible for all investment decisions in line with the mandate set out in the Limited Partnership Agreement, and liable for all debts and liabilities of the Fund. In return for its services, it will receive fees for its services.

This is the sum of remunerations (earnings) received by employees (your salary), income earned from self-employment, private pensions and investments, and cash benefits (such as state retirement pension, child benefits).

The amount you pay us every month for the use of your Preferred Home, while you save towards a purchase from us.

This is a measure, expressed in percentage, of the annual Gross Rent received relative to the Purchase Price of the Preferred Home.

This is the period between the acquisition and exit of the property investments. We anticipate this to cover the 10-year lifecycle of the Fund. However, the Holding Period for each individual property investment will be 5 years, matching the duration of the lease agreement with tenants.

The total of Committed Costs, Fixed Costs and Living Costs, excluding Rent.

Ratio of Sale Price of Preferred Home to Tenant’s Net Pay, expressed as a multiple.

Ratio of Sale Price of Preferred Home to Tenant’s Gross Income, expressed as a multiple.

Tax charge levied on income earned, including salaries & benefits, business profits, pensions, rental income, dividends and interest from savings, trust income etc.
For more information, visit https://www.gov.uk/income-tax

This is the cash contribution that the tenant pays upfront towards the Purchase Price of the Preferred Home. This secures a percentage share in the property-owning SPV, and is placed into a secure Tenant Deposit Scheme.

This is a financial metric used to measure the performance of our investment in the property, and is defined as the percentage rate of interest earned on each £1 invested for each period it is invested. The higher the IRR, the better the investment.

This is the period during which investment acquisition takes place. We anticipate this to occur during the first 5 years of the Fund’s lifecycle, but could be extended if there is still committed capital.

This is a legal entity structure that will be set up as the General Partner or Sponsor, which will ensure that the legal responsibility of the individual members of the General Partner are protected from the entity. Under this arrangement, the individual members of the General Partner will not be responsible for any liabilities. This structure also enables the General Partner to sign leases on behalf of the LP Fund.

This is the investor committing equity to the Fund for the purchase of the properties. They participate as passive investors, with their individual liability limited to their capital commitment to the Fund. They cannot participate in the daily operations of the Fund without forfeiting their limited rights. In return for their investment, they will receive dividend distributions and a share of the capital value appreciation upon exit of the investments.

This is a legal document that governs the relationship between the General and Limited Partners. The content is only lightly regulated and heavily based on negotiations between the partners.

This is the total of your monthly or annual costs for:
1. Food & Drink
2. Lifestyle, Entertainment & Leisure - social outings (cinema, theatres, museums, restaurants), personal care, clothing, audio-visual & gaming equipment, furnishings etc.
3. Holidays

The lease agreement between the property-owning Special Purpose Vehicle (SPV), in its capacity as Landlord, and the tenant/homebuyer, which outlines the terms of the lease over the occupational period.

This is a measure of the return generated by an increase or decrease in the capital value of the property (excluding Dividends from Rental Income and after deducting sales costs) during the holding period, relative to the acquisition cost of the property.

This is a measure, expressed in percentage, of the annual Net Operating Income received (after deduction of property operating costs) relative to the acquisition costs of the property (Purchase Price of the Preferred Home plus purchaser’s costs).

This is the remaining rent after deducting the Preferred Home’s operating expenses (ground rent, management fees, building & landlord insurance and other service charges) from the Gross Rent received.

Gross Income minus employee National Insurance Contributions, Pension Payments (either via Net pay, Salary Sacrifice or ‘Relief at Source’ Tax Relief arrangements) and Income Tax.

This is a measure, expressed in percentage, of the annual Net Operating Income relative to the Purchase Price of the Preferred Home.

This is a measure of the total return generated from dividends (after deducting property costs and administration fees) and an increase or decrease in the capital value of the property (after deducting sales costs) during the holding period, relative to the acquisition cost of the property.

A pension is a kind of retirement plan, usually tax-exempt, whereby an employee makes regular payments from their salary to a pension provider to save for their future benefit. The employer also makes matching contributions towards the same pool of funds set aside for the employees’ future benefit, which is then invested on the employees’ behalf, allowing an employee to receive benefits upon retirement or disability

The home chosen by the tenant, and vetted and purchased by us.

This is the rate of return (usually defined by a particular IRR) that the Fund needs to achieve before the Sponsor or General Partner receives its agreed Performance Fee based on the equity investment.

The total monthly contributions made by the Tenant, over the term of the
agreement, towards the Purchase Price of the Preferred Home. This will be
used towards a mortgage deposit for future mortgage financing at the end of the
agreement.

This represents the agreed amount between SuchHomes and the seller that the
Preferred Home is purchased for.

Net Pay minus Household Expenditure, excluding Rent.

Net Pay minus Household Expenditure and Rent.

This is a limited company set up solely for the purpose of purchasing, leasing and selling the property to the tenant. This allows us to offer ownership of the property to our investors and the tenant via ownership percentages in the vehicle. This setup allows fewer risks and liabilities for the investors and the tenant, as it is a standalone legal entity with its own assets and liabilities, which isolates financial risks, for both investors and tenants, and personal income tax liability for the tenant.

This is a progressive property tax paid to HMRC when freehold or leasehold residential property or land over £250,000 (non-residential property and land over £150,000) is purchased in England and Northern Ireland. The amount paid is dependent on the Purchase Price and tax thresholds.

The Sponsor is usually the General Partner of the Fund raised from investors to purchase the properties.
See the definition of General Partner above.

Net Pay Arrangement: With this arrangement, the employee’s regular pension contributions are deducted from your salary before any tax is deducted, which ensures that they automatically receive all tax relief they are entitled to, with no need to claim anything from the tax authorities.
Example: If the employee contributed £100, the whole amount will go into their pension pot, with no need to claim anything further (based on their tax rate) from the authorities.
 

Salary Sacrifice Arrangement: With this arrangement, the employee agrees to a reduction in their salary (for pension purposes) by an amount equal to their pension contributions, with the employee’s pension contributions then paid by the employer in addition to the employer’s own matching contributions. This
means that the employee pays less Income Tax and National Insurance, as it is calculated on the reduced salary, thereby contributing more efficiently to their pension. This is a tax-efficient and cost-effective way of deducting both employee and employer pension contributions. ‘Relief at Source’ Arrangement: With this arrangement, tax calculated on your salary will be initially deducted along with national insurance contributions, leaving your take-home pay from which your pension contributions (net of the tax rate) will then be deducted. Since pension contributions are deducted after tax, you will pay 80% (based on 20% tax rate) of your elected pension contribution, with the remaining 20% of your elected pension contribution topped up by your pension provider. Your pension provider will then claim 20% tax relief from the tax authorities. If you pay Income Tax at a higher rate than 20%, you can claim extra relief directly from HMRC through a Self-Assessment form. They will either send the extra relief directly to you or adjust your tax code to reduce the total amount of tax you pay over the year.
If you are a non-tax payer or live in Scotland and pay income tax at a rate of 19%, you will still benefit from a 20% top-up on your contributions from the government.
Example: If you elected to contribute £100 towards your pension, £80 will be deducted from your ‘take-home’ pay, which will be topped up with £20 from your pension provider. They will then claim £20 back from HMRC.

This is a government-approved scheme that holds and registers rental deposit collected from tenants at the start of an Assured Shorthold Tenancy (AST) Agreement. This scheme ensures that the tenant’s deposit is protected, and it is the responsibility of the landlord to protect the tenant’s deposit 28 days after receipt. Some of the common ones to use are the government-approved TDS, Deposit Protection Service and MyDeposits.

This is formal land registry document (known as TR1) used to record the transfer of a property from the seller to the buyer and confirms that the property is registered. It contains the title number, address, legal name of seller, legal name of buyer, agreed purchase price and any new rights or covenants declared in the purchase contract.