Whilst the impact of the cost-of-living crisis is ongoing, the housing crisis in the UK has taken a front seat in the media. The market has seen record high mortgage rates which has become a battleground for divorcing couples, as well as sky-high rental prices and a lack of housing.
These issues are having a significant impact on divorcing couples across the country.
Housing is often a contentious subject in divorce proceedings, as couples fight over whether to keep the family home, and, if they do, who gets to live in it. As mortgage rates have risen, what to do with the marital property has become an increasingly tricky subject.
What happens to the home in divorce?
Generally, there are three options for divorcing couples when it comes to property. The first is to sell the house and pay off whatever mortgage is left. They then divide any equity. This money is used to put a deposit down on a new house or to rent a property.
The second option is to keep the family home and the mortgage in both names. The couple agree to sell the property at a later date, for example when their youngest child turns 18.
Finally, in some divorces, one party will buy out the other’s interest in the house and transfer ownership into their sole name.
If you decide to sell the marital home, equity is apportioned according to various factors, including the borrowing capacity of each party.
Nevertheless, being able to afford two separate properties is not always guaranteed especially in the current climate.
If you are unable to come to an agreement with your ex-spouse about your marital property, it may be necessary for the court to step in. Although the court’s starting point will be a 50/50 split of the assets, the decision will be based on fairness, depending on the needs of each party, their future earning capacity, the wellbeing of any children.
For those going into renting, no-fault evictions are a concern. The government has again delayed the Renters (Reform) Bill. This piece of legislation would improve security for renters as it would impose restrictions and obligations on private landlords, preventing them from evicting tenants without proof under Section 21 of the Housing Act.
What options are there?
The housing crisis is making property decisions increasingly difficult. Combined with the impact of the cost-of-living crisis, couples going through divorce are having to think outside the box.
Birdnesting is one such avenue. This is where the children stay in the family home, and their parents rotate into and out of the house. Each parent will have a set amount of time in the house, dependent on the child arrangement agreement.
However, this means that they will also need a separate living arrangement, but many turn to friends or family as a temporary solution.
However, this is not always possible. As the housing crisis continues, we will likely see more divorcing couples coming up with creative solutions to the housing issues.
It is important to discuss all the avenues available to you with a lawyer. When there has been full financial disclosure, negotiations can begin on what the marital pot will allow.
Useful Links
Property in Divorce – what you need to know
How to financially plan for your divorce: Watch on YouTube
Top 3 Financial Considerations
Budgeting Solo in the Cost of Living Crisis: Watch on YouTube
Can I afford to divorce my partner?
Dangers of a DIY Divorce: Listen on Spotify
Taking control of your finances on separation and beyond: Listen on Spotify
