When selling a house in a divorce in the UK, there are no winners in what can be a highly emotional and physically draining time. It is essential to maintain a degree of balance regarding the emotional and financial consequences during these challenging times. Carving up assets and income, which may have taken decades to accumulate, is not easy. So, where do you stand, and what are the options when selling a house in a divorce in the UK?
Chilling UK divorce statistics
Let us delve a little deeper into this challenging subject. The DontDisappoint website has published some sobering facts on divorce in the UK:-
- The UK divorce rate is estimated at around 42%
- The average UK divorce age for men and women is 46.4 years and 43.9 years, respectively
- Completing a divorce can take as little as four months but typically much longer
- The average marriage in England and Wales currently lasts 32 years
The average marriage in England and Wales lasts 32 years. This suggests those going their separate ways in later life may have a debt-free marital home. According to the Office for National Statistics, in November 2021, the average house price in England was £288,000. A significant asset!
Further information from the Office of National Statistics is highlighted in the following graph:-
As there is potentially at least one major asset within many marriages, it is perfectly understandable that both parties will fight for “their entitlement”. So, what are the issues to consider when looking to sell a house in a divorce UK?
Should I take legal advice about homeownership if we are separating?
You must take legal advice concerning an impending separation so that both parties know their rights and their liabilities. In the midst of what will be an emotional time, your solicitor will take a pragmatic look at the situation. Without a hint of emotion, they will advise you of your rights and most appropriate actions. Whether you decide to take the advice of your solicitor is up to you.
Can I sell my house before a divorce is agreed?
Even though many divorces end in acrimony, some relationships simply come to an end with both parties in agreement. They may simply decide to go their separate ways, sell the marital home, split the net proceeds and move on. In this scenario, there are several options to consider with regards to selling the marital home:-
Traditional open market sale
In theory, there is nothing wrong with listing the property with local/national estate agents and waiting for offers to arrive. However, in practice, as both parties are going their separate ways, and the average estate agent property sale takes around nine months from start to finish, this may not be practical. Also, on a side note, the longer there is a connection between the two parties, the more chance of conflict and animosity.
If you consider selling a house in a divorce UK settlement, you may be tempted to look towards property auctions. However, there are various fees to consider and the prospect of the property not selling. It may also take some time to complete. For many people looking at a quick sale the property auction route may be a little too volatile.
Quick house buying company
Cash has always been king in the world of investment. It is even more prominent for those looking at selling a house in a divorce UK sale. This has prompted the emergence of many companies looking to acquire property for cash, with settlement often completed within 4 to 6 weeks. Sale prices tend to be less than the market value because of the prompt payment, potential mortgage savings, and many companies will cover legal expenses. This has become the preferred sale route for many couples going through a divorce.
Who is liable for mortgage payments during a separation?
Depending on the specific situation, both parties may still live in the marital home. Alternatively, one party may have moved out. It matters not when it comes to mortgage payments. With a joint mortgage, both parties are liable for not just a 50% share but for the whole mortgage if the other party defaults. This is something that many divorcing couples are unaware of. Only find out when the other party fails to contribute to mortgage payments!
If the mortgage is only in one person’s name, that person is liable for any outstanding mortgage whether or not they live in the property. In some cases, where the other party may be potentially homeless, or there are children involved, they may be granted the right to live in the marital home until a final settlement is reached. This is yet another reason why it is essential to conclude a divorce settlement as soon as possible.
Who is allowed to stay in the home during an ongoing separation?
There is a common misconception that any party moving out of the marital home during an ongoing separation/divorce has given up their rights. This is not the case. In most cases, both parties will have what is known in legal terms as “home rights”, which gives them the legal right to remain in the property until the divorce is finalised. It is important to note that even those not named on the property deeds/mortgage still have rights regarding the marital home.
The situation can become even more complicated where children or other dependents are living in the property. If both parties are unable to come to an arrangement, the courts will step in and take the appropriate decisions which are legally binding.
How is a house treated in a divorce settlement?
There are three main options when it comes to the marital home in the event of a divorce:-
- One party will remain in the property and take over mortgage payments
- One party may agree to buy out the other, paying them for their share of the property
- Overall asset adjustments mean one party takes ownership of the marital home
- The property is sold, and the net proceeds split between the parties
In the event that the two parties are unable to come to a formal arrangement between themselves, solicitors and the courts will become involved. Ultimately, as part of the divorce settlement, they will dictate division of the former marital home.
What if one party refuses to sell the marital home?
The idea that one party in a divorce can block the sale of the marital home is legally flawed. Yes, they may drag their feet, taking time to respond to solicitors’ letters and ultimately reject all offers. However, in this situation, the party looking to sell the home and split the proceeds can go to court. If the court agrees that one party is being unfair, they can impose a legal ruling allowing the property to be sold, even if the other party continues to disagree.
In reality, one party looking to slow down and ultimately block the sale of the marital home, for whatever reason, will cause a delay. The courts will eventually become involved, but this could be weeks or even months down the line.
What happens with a divorce involving children?
Traditionally, with children the courts tend to look favourably at their circumstances and the potential impact on their lives. There are several options open to the courts:-
- Outright ownership of the home may be awarded to a mother looking after their children
- This ownership may last until the children turn 18, go to college, or it may be permanent
- Alternatively, if the mother were to remarry, then the ownership split would change
- The father will likely be asked to contribute towards mortgage and housing costs
It is also important to note that the roles of mother and father in the above example can be reversed if the father decides to remain in the property with the children. Usually, the father moves out, but this isn’t always the case.
What are the rights of those in a civil partnership/outside marriage?
Those who are part of a civil partnership will have a legally binding agreement that will formally record the ownership of assets, etc. In the event of a separation/termination of the legally binding contract, both parties are bound by the agreed split of assets.
The situation for those living together outside of civil partnership/marriage has attracted several myths and untruths in the past. Parties not named on the property deeds or the mortgage tend to have no home rights. In the event of the relationship terminating, they would likely have no legal right to remain in the property. There will be some occasions where circumstances dictate the involvement of the courts, which could, in theory, overrule previous agreements. Take legal advice!
What is the quickest way to sell a home as part of a divorce settlement?
During the midst of a divorce, whether amicable or otherwise, it can be challenging to appreciate the wider financial consequences. This is especially relevant where the marital home continues to incur mortgage costs and general running expenses. Many companies who buy houses for cash will cover legal fees and reduce the average sale time from nine months to between 4 and 6 weeks. This has become the preferred option for many people looking to sell a house in a divorce UK settlement.
The following illustration gives a practical example of the often unappreciated running costs:-
Considered from a practical point of view, those looking to go their separate ways will be keen to start a new life under their own steam. If the sale of the marital home were to last upwards of nine months, there would be constant reminders and likely growing friction and heightened emotions. When you consider the financial scenario, as illustrated above, it is no surprise that many couples looking at selling a house in a divorce UK settlement are turning to cash buyers.
It is safe to say there are no winners when it comes to divorce, separation and the disintegration of family life. Amidst the emotional turmoil, mental anguish and physical impact, there is also the subject of the splitting of assets. As difficult as it is, it is essential to be practical and conclude as clean a split as possible. For most married couples, their main asset will be the marital home, although other issues such as pension rights will also need to be considered. A quick resolution and separation are the best for both parties in many cases.