Glossary of terms
This glossary of terms has been composed by FIRST STRATA to provide you with an easily accessible and comprehensive description of the many terms frequently used in all aspects of land sales.
We trust you will find it both useful and informative.
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
1. For property income taxation purposes, generally gross rent less allowable deductions, ie actual outgoings.
2. For property valuation purposes this corresponds with net rental. Cf TRUE NET INCOME.
Formerly sometimes referred to as “effective floor area”.) The usable space within a building measured to the internal finish of structural, external or party walls, but excluding toilets, lift and plant rooms, stairs and lift-wells, common entrance halls, lobbies and corridors, internal structural walls and car-parking areas.
See RENTABLE AREA.
The result of applying the net present value method of appraisal.
A method used in discounted cash flow analysis to find the sum of money representing the difference between the present value of all inflows and all outflows of cash associated with the project by discounting each at a target yield. Cf INTERNAL RATE OF RETURN.
See REDEMPTION YIELD.
Income from property after deduction of all outgoings, including repairs (with a yearly provision for repairs likely to be required at longer intervals, eg lift repairs, major decorations), insurance and management costs to be met by the recipient but excluding taxes payable by the recipient but excluding taxes payable by the recipient. Cf GROSS RENT.
In the valuation of land and buildings in accounting for depreciation, this is “… the gross replacement cost reduced to reflect the physical and functional obsolescence and environmental factors so as to arrive at the value of the building to the business at the relevant date”. (RICS Guidance Notes on the Valuation of Assets.) See DEPRECIABLE AMOUNT; GROSS REPLACEMENT COST.
A term used by retail management to define the internal floor area of a department store occupied by the selling and service departments. It includes the floor area to which customers have access, counter space, checkouts, fitting rooms, space immediately behind counters and circulation space forming an integral part of the department. It excludes lobbies, staircases, plant rooms, cloakrooms and other amenity rooms, together with floorspace serving more than one department such as line check-outs and window display space. It is measured from the internal faces of walls and partitions and the centre of aisles to adjoining departments.
The area in a retail store open to the public where the goods are displayed and sold. It excludes service areas, eg toilets, passageways, lifts and staircases.
Gross trading profit less working expenses (some being incurred each year, others being the annual equivalent of any estimated expenditure likely to be incurred at longer intervals).
Descriptive of such techniques as critical path analysis (CPA), programme evaluation review techniques (PERT) and precedence techniques.
See TRUE NET YIELD.
A method of valuation under section 9 of the Leasehold Reform Act 1967 which involves carrying out a valuation of the site by the residual method by reference to the value of a new house, when completed, and the total cost of building it. Cf CLEARED SITE APPROACH; STANDING HOUSE APPROACH.
A town developed (or in the course of development) on land designated as such under one of the New Towns Acts, now (1988) consolidated in the New Towns Act 1981. After such designation, subsequent development is under the control of a development corporation, who also administer and manage the whole or part of the new town area. See NEW TOWN DEVELOPMENT CORPORATION.
Under the New Towns Act 1981, a quasi-autonomous body established by and responsible to the Secretary of State for the Environment (or for Scotland or for Wales) for the creation and management during development of a particular new town. In practice, emphasis is placed upon the need to consult with local authorities on major issues to obtain their understanding and agreement to proposals, even though this does not prejudice the right of the development corporation to make the decisions. The local authority may refer their views on some issues to the Secretary of State for consideration before the development corporation’s decision is implemented. See COMMISSION FOR THE NEW TOWNS; NEW TOWN.
See COMMISSION FOR THE NEW TOWNS.
The value of an interest in property which has no worth for a particular purpose or, alternatively, for any purpose.
Consideration in name only and having either insignificant monetary value or at least one so small that it is token in relation to the market value of a property. See PEPPERCORN RENT.
The percentage rate of interest stated on the face of a bond or gilt-edged stock, eg undated 3.5% War Loan. (The real rate of interest will be different where the market value of the stock is not at its face value.) Cf REAL RATE. See NOMINAL VALUE 1.
