Property investment terms you need to know

January 20, 2026

If you are new to the property investment environment, you may hear a lot of terminology you are not yet familiar with. Whilst this can be confusing and frustrating at times, we have collated a list of terms and phrases to help you understand and learn more about property investment.

Some terms may be familiar as they are used in traditional house purchasing, whereas others will be completely new, but are easy to understand. To make you feel more comfortable, we will break down some of the most popular terms.

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‍Key metrics to evaluate your investment‍

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‍Yield - The income generated by an investment over a particular period of time expressed as a percentage of its value. “This apartment offers yields up to 10%”

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Capital growth - The appreciation in value of a property over a period of time. Calculated by comparing its current value to the original amount paid.

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Cash flow - The net movement of cash in and out of a property, for example, in would be rent and out would be taxes, mortgage payments, etc. A metric used to assess a property's profitability.

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Return on Investment (ROI) - A profitability metric used to evaluate how well an investment has performed. ROI considers all cash spent against the income generated.

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Equity - The amount of your home that you actually own outright. The equity you have is determined by the property's current market value and the amount that remains to be paid on the mortgage.

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‍Fees and taxes associated with investing

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Ground rent - A payment made by the leaseholder (owner/tenant) to the freeholder (landowner) for the right to live on the land the property is built on.

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Peppercorn - A term closely associated with the above, peppercorn rent is where the ground rent has been removed entirely.

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Service Charge - A fee collected to pay for services related to the property, paid by leaseholders or residents for maintenance fees, cleaning, insurance, etc

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NRLS - The Non-resident Landlords Scheme (NRLS) taxes the UK rental income of people whose usual place of residence is outside the UK.

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Stamp Duty Land Tax (SDLT) - A tax you must pay in England and Northern Ireland if you buy a property over a certain price, with rates varying by location, property value and if you are a first-time buyer or own other properties.

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Capital Gains Tax (CGT) - The tax applicable to the profit made on a property at the point of sale. Calculated by comparing the current sale price with the original purchase price.

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The different types of property investment

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Off-plan - An off-plan property is a property that hasn't been built yet, or is under construction. Common in property investment, benefits for investors include lower prices and payment plans for investors to pay in instalments.

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Buy-to-let (BTL) - A property you buy specifically to rent out to tenants, rather than to live in yourself.

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Build-to-rent (BTR) - Large-scale developments like apartment buildings purposefully built to be rented out long-term. These typically include amenities suited to renters, e.g. gyms and communal spaces.

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Purpose-Built Student Accommodation (PBSA) - Privately owned and managed accommodation for students, typically offering more premium rooms and amenities.

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House in multiple occupancy (HMO) - Where at least three tenants live in the same household (not family) and share a toilet, bathroom and kitchen facilities.

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Freehold - You own both the property and the land it sits on indefinitely

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Leasehold - You own the building, e.g. a flat for a certain amount of time, but not the land it sits on.

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Commercial - Property used specifically for business or income-generating purposes rather than for residential living.

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Having an understanding of these commonly used property investment terms can allow you make more informed decisions without being thrown off by jargon you might not understand.

Want to learn more about UK property investment in 2026? Contact our team of experts today for a free property investment consultation! Or visit our website to visit our latest opportunities.

Property investment terms you need to know

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