Frequently Asked Questions

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Glossary

Acquisition Costs

The total costs involved in buying a property, in addition to the purchase price. These usually include Stamp Duty Land Tax (SDLT), solicitor or conveyancing fees, survey costs and related charges. For fractional investors, acquisition costs are built into the overall funding target.

Glossary

Annualised Return

Annualised return shows the steady percentage an investment grows per year, assuming compounding, even if it was held for several years. It allows fair comparison between investments of different lengths. For example, if £1,000 grows to £1,229 over three years, the annualised return is about 7.1% per year.

Glossary

Capital Appreciation

The increase in a property’s value over time, realised when the property is sold. For example, if a property is bought at £400,000 and sold five years later at £500,000, the capital appreciation is £100,000 (25% overall), which equates to an annualised growth rate of about 4.6% per year.

Glossary

Cash Flow (Net Cash Flow)

The money left from rent after subtracting all SPV/property expenses paid in that period. For example, if monthly rent is £1,600 and total expenses (service charge, management fee, insurance, maintenance) are £500, net cash flow is £1,100 for that month.

Glossary

Net Yield

The annual percentage return that the investment generates after all expenses are deducted. For example, The property is priced at £300,000. If gross rent is £24,000 a year and expenses are £6,000, net rent is £18,000. Net yield = 18,000 ÷ 300,000 = 6%.

Glossary

Purchase Price

The agreed amount paid to acquire the property, not including any acquisition costs such as SDLT, legal fees, surveys and any buyer’s premium.

Glossary

Return on Investment (ROI)

How much you actually earn on your investment overall. It’s shown as a percentage: ROI = total profit ÷ amount invested (where profit is net rent received plus any net gain at sale). Example: if you invest £1,000 and get £1,300 back in total → profit £300 → ROI 30%.

Glossary

Total Return

How much you earn overall on your investment over the whole holding period. It adds up every rental distribution paid to you during the hold (for example, quarterly over five years) plus your share of the net sale proceeds at exit. Expressed as a percentage: total return (%) = (total value − amount invested) ÷ amount invested.

Glossary

Build-to-Rent (BTR)

Homes built specifically to be rented long-term and professionally managed, rather than sold. Returns are driven by occupancy, rents and operating costs.

Glossary

Building Regulations

Legal standards for design and construction covering safety, structure, energy efficiency and accessibility. They are separate from planning permission; some projects need both.

Glossary

Buildings Insurance

Insurance that covers the structure and fixed parts of a home (walls, roof, fitted kitchen/bathroom). In flats, the freeholder usually arranges the building’s policy and recovers the cost through the service charge.

Glossary

Buy-to-Let (BTL)

Buying a property with the intention of letting it out rather than living in it.

Glossary

Buyer’s Premium (auctions)

An additional fee payable by the winning bidder on top of the hammer price, set in the auction’s terms. Where a deal is sourced at auction, the premium should be included in the total acquisition costs.

Glossary

Capital Appreciation

Glossary

Capital Expenditure (Capex)

Money spent to buy, improve or extend a property that provides benefits beyond the current year. Typical capex includes a new roof, extension or major refurbishment. It is different from routine repairs, which are incorporated in day-to-day costs.

Glossary

Cash Flow (Net Cash Flow)

Glossary

Commodity Murabaha

Commodity Murabaha is a type of Islamic financing where a financial institution buys a real commodity on behalf of a customer and sells it to them at a pre-agreed, mark-up price, which the customer then pays back over time. It creates a receivable similar to debt finance and is not used in Wahed’s equity-only model.

Glossary

Comparable Evidence (“Comps”)

Recent sales of similar properties used by valuers to estimate market value. Good comps are recent and closely match location, size, condition and tenure. This is a core part of professional valuation practice.

Glossary

Completion

The legal point when ownership transfers from seller to buyer and funds are paid. It happens after exchange of contracts; keys are usually released on completion day.

Glossary

Completion Statement

A financial breakdown from the conveyancer showing the purchase price, taxes, fees, apportionments and amounts already paid or still due on completion.

Glossary

Contingency Fund (Reserve)

A cash buffer set aside by the SPV for unexpected items, for example urgent repairs or short rental voids.

Glossary

Conveyancing

The legal process of transferring property ownership. A solicitor or licensed conveyancer handles contracts, searches and the movement of funds, then registers the new owner with HM Land Registry.

Glossary

Cooling-Off Period (FCA)

For first-time investors in certain high-risk investments, firms must wait at least 24 hours before allowing investors to invest. The 24-hour period starts when you complete your appropriateness questionnaire and only after it ends you may proceed to invest.

Glossary

Council Tax

A local tax charged by councils on residential properties in England and Wales. Each home is placed in a valuation band and the council issues a bill for that dwelling. Liability usually sits with the people living in the property under a single tenancy, but the owner is liable when the home is vacant or when it is let as an HMO with separately rented rooms.

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Acquisition Costs

Annualised Return

Capital Appreciation

Cash Flow (Net Cash Flow)

Net Yield

Purchase Price

Return on Investment (ROI)

Total Return

Build-to-Rent (BTR)

Building Regulations

Buildings Insurance

Buy-to-Let (BTL)

Buyer’s Premium (auctions)

Capital Appreciation

Capital Expenditure (Capex)

Cash Flow (Net Cash Flow)

Commodity Murabaha

Comparable Evidence (“Comps”)

Completion

Completion Statement

Contingency Fund (Reserve)

Conveyancing

Cooling-Off Period (FCA)

Council Tax

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