Economy and Business Terms - Charlie, your teacher of English
to-let mortgages have been on offer in the UK since the late 1990s. Lenders calculate how much
they are willing to lend using a different formula than for an owner-occupied property. For an owneroccupied property, the calculation is typically a multiple of the owner's annual income.
The interest rates and fees that are offered on BTL mortgages are, on average, slightly higher than
those for an owner-occupied mortgage. This is due to the perception among banks and other
lending institutions that BTL mortgages represent a greater risk than residential owner-occupier
mortgages.
Campaign: It's a series of marketing activities designed to achieve clearly defined goals within a
specified time frame. Whether the ultimate goal is to acquire new customers, launch a new product,
promote brand awareness or generate leads, smart conversion marketers think in terms of
campaigns.
Capital Gains: In real estate and investments, the difference between the purchase price and the
sale price when the sale price is more. That is, when an investor buys a security or real estate and
sells it for a higher price, he/she incurs a capital gain. Capital gains in the United States are taxed at
a lower rate than other income if the asset is held for longer than one year. One may use capital
losses to offset capital gains to minimize one's liability for capital gains taxes; indeed, some
investors do so deliberately.
Capital gains tax: It is the tax paid to the Inland Revenue Department when you make a capital
gain, that is, a profit from selling an asset, which could be anything from shares to a painting or a
holiday home. Everyone has an allowance before they become liable for capital gains tax and rates
vary. In general, you do not have to pay capital gains tax on your car, your main home, ISAs or
personal belongings worth £6,000 or less. You pay the tax at whatever your highest rate of income
tax is. But reliefs and exemptions are available - so those who could be liable are best seeking
expert advice.
Carry trade: The carry trade occurs when investors borrow money at low rates of interest in one
currency and invest it at higher rates in another. The most common carry trade of recent years has
been in yen.
With interest rates in Japan at virtually zero, speculators have been borrowing there to invest in the
UK or the US, where rates are more like 5%. There is a big risk, though, that the exchange rate
moves against you. With the recent financial market turmoil, investors fled from risky investments
and unwound many of their yen carry trades.
This caused the yen to surge by over 10% in less than a fortnight. In the past couple of days,
though, the yen has fallen back again, possibly as calmer markets have encouraged a renewed
bout of carry trading.
Cash: Cash normally means bills and coins, as in paying in cash. However, the term is used in a
business plan to represent the bank balance, or checking account balance.
Cash flow: The cash flow in a business plan is the change in the cash balance. For example, the
cash flow for a month would be a positive $10,000 if the balance was $10,000 at the beginning of
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