When you’re looking to rent, and particularly when you get to the point of signing tenancy agreements, you might come into contact with some terms and property jargon you’re unfamiliar with.
Here are some common rental property terms you might come across when you’re looking to rent your next home.
Affordability checks
An affordability check is when a letting agent or landlord checks whether you earn enough to afford the rent.
Affordability criteria can vary, but usually, the collective annual salaries of everyone who’ll be making rental payments would need to be around 30 times the monthly rent for you to be considered able to meet the monthly rental payments comfortably. So if you’re planning to split the rent with others (and you’re all named on the tenancy), the calculation would apply to your combined income.
Arrears
Arrears refer to rent that is outstanding. Arrears may be a full amount for a rental period or in part. If you’re struggling to pay rent, it’s always better to talk to the landlord or agent early rather than go quiet.
AST (Assured Shorthold Tenancy)
An Assured Shorthold Tenancy is the most frequently used tenancy agreement and is also referred to as an ‘AST’.
After the Renters’ Rights Act comes into force in May 2026, ASTs won’t be used anymore. Fixed term tenancies will be replaced with periodic tenancies that give more flexibility. So you won’t be locked into a long contract if your circumstances change.
Banker’s Draft
A banker’s draft is a more secure form of payment because it can’t bounce due to lack of funds in your bank account. Essentially, you give the bank the cash and they give you a cheque in that amount to give to the person you’re paying. Most banks need at least 24 hours to provide a banker’s draft and may charge you a fee. You may be asked to pay your deposit and full month’s rent using a banker’s draft.
Bills Included
If you see ‘Bills Included’ on a property listing, it means one of all of your utilities is included in the advertised monthly rental amount. It’s worth checking exactly what’s included, as this can sometimes be all bills, or might only be internet and other services.
Break Clause
A break clause is a clause sometimes included in a fixed term tenancy agreement. Typically, this clause may be included if the initial fixed term is for a year or more. You can find more information on break clauses here.
Check-in report
A check-in report, which includes the inventory (more on that below), details the condition of the property when you move in. It will be used to compare the property’s condition when you move out, so it’s worth making sure everything’s correct, as this will help determine whether any money is deducted from your holding deposit.
Council Tax
A local authority tax that applies to England, Wales and Scotland. It is usually the responsibility of the tenant to pay. You can find more information on the costs of renting here.
Covenants
Covenants are terms that you agree to as part of your tenancy agreement. They may state the things you can’t do while occupying the property and they set out the promises that a landlord or tenant both make during the course of the tenancy.
Credit Search References
Before a tenancy agreement is signed you will be referenced by your agent or landlord. Many agents and individual landlords use specialist referencing companies who will contact your employer (or an accountant if you are self-employed), your current landlord and also check out your credit history to assess your ability to pay the rent. You can find more information on referencing here.
Deposit
Landlords will ask new tenants to pay a tenancy deposit to cover damage or unpaid rent. The deposit is usually the equivalent of six weeks rent. More information on deposits and how they work can be found here.
Deposit Protection Scheme
Your landlord or letting agent must place your deposit into a government-approved protection scheme within 30 days of receiving the money.
This protects your money, and helps resolve disputes if you disagree about deductions when you move out.
Dilapidation
Damage to a property or contents that is considered to be more than acceptable wear and tear.
Energy Performance Certificate (EPC)
All properties offered for let require Energy Performance Certificates (EPC), and in most cases, a property can’t be let if it has an EPC rating below an E. Some exceptions apply in rare cases, and you can read more about properties exempt from EPCs here. An EPC provides a rating of a property’s energy efficiency, running costs and environmental impact rating (carbon emissions) based on the property’s condition on a given date. Read more about energy performance requirements for rental homes here.
Fixtures and fittings
The contents of a rented property that may include window coverings, light fittings, carpets, kitchen units and white goods are called “fixtures and fittings”. If you are renting a furnished property, it may also include furniture.
Gas Safety Regulations
It is the landlord’s legal responsibility to ensure that a gas safety check is carried out prior to letting a property and then every year after. The check must be carried out by an authorised engineer who’s on the Gas Safe Register, and a copy of the record must also be given to the tenant.
Grounds For Possession
The reasons for applying to the courts for repossession of a property.
Guarantor
A guarantor is someone who agrees to sign a tenancy agreement and in effect guarantees that they will undertake the full obligations under the tenancy agreement on the tenant’s behalf. If for some reason the tenant cannot pay the rent, the guarantor will make the payments. A guarantor is common if you’re:
- a student
- renting for the first time
- have a low income
Holding Deposit
A holding deposit is an amount of money paid to a landlord or letting agent to reserve a rental property before the signing of a tenancy agreement. A holding deposit is normally non-refundable if you were to withdraw your application for the tenancy. If the tenancy proceeds, the amount of the holding deposit is deducted from the rent.
House in Multiple Occupation (HMO)
Your property is an HMO if: at least 3 tenants live there, forming more than one household, and there are shred facilities such as toilet, bathroom or kitchen facilities. All local councils must license “large HMO’s” – properties that are higher than three storeys, housing five or more people from two or more households. This legislation applies to any building or part of a building that is occupied by people who do not live as a single household – that is as a single family and where they must share amenities such as a kitchen or bathroom. Bedsit accommodation and house shares where there are no family relationships are examples of HMOs.
Initial Term
The first ‘fixed’ period of a tenancy, which relates to Assured Shorthold Tenancies. When the Renters’ Rights Act comes into force in May 2026, tenancies will become rolling, rather than fixed term.
Inventory
The inventory is a listing of the contents of a property. This list can include the state and condition of a property (including the garden) and can cover whether the property is clean or dirty and the state and repair of fixtures and fittings such as power points, furniture, windows etc.
At the start of the tenancy, there should be an inventory to “check in” with the tenant and then at the end of the tenancy the tenant should be “checked out”. Agents and landlords may use a third party inventory clerk to carry out the inventory.
Let Agreed
A property that’s let agreed has had a provisional agreement from the landlord to rent out the property to a tenant. But, it the contract hasn’t yet been signed, and the letting agency or landlord is in the processing of reviewing the tenant’s references, and carrying out all the necessary checks,
Where a tenant’s application is approved, the property will often remain on the market (with status let agreed) until the contracts are completed – at which point it will be removed from the market.
Liability
Where there is more than one adult living in the property, the tenancy agreement will state that they are ‘jointly and severally’ responsible. That means that tenants are liable for the payment of the rent by all the other tenants, as well as any breach of the tenancy agreement by any of the other tenants as well as their own portion of the rent and responsibility.
Managing Agent
An agent or company responsible for the maintenance and management of the property while a tenant is living there. Not all properties are professionally managed so your landlord may be responsible for the maintenance of the property.
Notice Period
The period of time that a tenant or landlord must give to end the tenancy agreement.
Periodic Tenancy
A periodic tenancy is a tenancy that continues for successive periods until the tenant gives the landlord notice that they want to end the tenancy. When an Assured Shorthold Tenancy ends, it will become a periodic tenancy unless the tenant signs a renewal agreement.
PCM
PCM is a short-form referring to the rental amount being paid on a per calendar month basis.
Prescribed Information
The landlord is legally required to make certain information regarding the tenancy deposit protection scheme protecting the deposit, the deposit and specified tenancy related information available to the tenant or tenants.
Referencing
Referencing is a set of checks carried out before you move in.
They usually check:
- your income
- your employment
- your credit history
- references from previous landlords.
This helps confirm you can afford the rent and have rented responsibly before.
Renewal
At the end of the fixed term of an Assured Shorthold Tenancy some tenants and landlords choose to renew the tenancy for another fixed term. That gives the tenant a bit more security. Landlords may also ask a tenant to sign a renewal if they want to change the terms of your tenancy agreement and that could include raising the cost of the rent. For more information, take a look at our section on ending and extending tenancies.
Section 21 notice
A Section 21 notice is a legal notice used by landlords in England to end an Assured Shorthold Tenancy without giving a reason for doing so. Tenants must normally be given at least 2 months’ notice.
As of May 2026, Section 21 notices will no longer be permitted as laid out in the Renters’ Rights Act.
Section 8 notice
A Section 8 notice is used when a landlord wants to end a tenancy for a specific reason, such as:
- rent arrears
- property damage
- breaking the tenancy agreement
Standing order
A standing order is an instruction to a bank to an account holder to make regular fixed payments to a particular person or company and is often used to pay rent, usually on a monthly basis. The standing order payments can be set up to finish by a particular date or will continue until cancelled by the tenant. It is worth noting that only the person whose bank account the funds are coming from can cancel the standing order. A standing order is not the same as a Direct Debit which is a payment method more often used when payments change from month to month. Direct Debits are not often used to pay rent. More information can be found in our section covering tenancy agreements and paying rent.
Statutory Obligations
Requirements and obligations of the landlord or agents acting on their behalf as set out by Acts of Parliament.
Sublet
When an existing tenant lets all or part of their home to someone else, this is known as subletting. Your tenancy agreement may say that you are not allowed to sublet or may state that you need permission from your landlord before subletting. If you sublet your property without permission your landlord may take legal action against you.
Tenancy agreement
A tenancy agreement is the legal agreement between a tenant(s) and landlord. It will include things like:
- the rent amount
- payment dates
- property rules and responsibilities
It’s really important to make sure you read everything carefully and understand it before signing. You can find more information on tenancy agreements here.
Tenancy length
The tenancy length is how long the landlord offers to let the property for. This will be recorded on a contract, or tenancy agreement, between you and a landlord.
However, the Renter’s Rights Act will come into effect in May 2026, and will do away with fixed-term tenancies. All tenancy agreements will be based on a rolling contract, although a six-month security period at the start of a tenancy will mean that landlords cannot evict tenants during that time, unless for a fault-based reason (for example, failing to pay rent on time).
Utilities
Things you’ll be using when living in the property, such as gas electricity, water and internet.
Wear and tear
Wear and tear refers to normal and expected deterioration from everyday use. Unlike where there’s been misuse or negligence, landlords can’t deduct money from a deposit for normal wear and tear. According to the Tenancy Deposit Scheme, examples of normal wear and tear include:
- lightly worn carpets
- faded paint or wallpaper
- light scuffs on floors
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