What is an agreement in principle and why am I being told I need one by my estate agent?

An agreement in principle (AIP), also known as a decision in principle (DIP), is a certificate or statement from a lender. It agrees that ‘in principle’ they would lend you a certain amount of money. This is issued after a lender has seen some basic information about you.

In the case of a first-time buyer, an estate agent will want to see an AIP to ensure you have been approved to borrow the right amount of money to purchase the property.