Home ownership and divorce – what are your options?

With research revealing that a third of UK couples who own a property together and have broken up still share a home, knowing your options after separation or divorce is crucial. Separating from your partner is after all a stressful time, and untangling the web of finances and other assets doesn’t make the process any less taxing.

In this blog post, we answer the most common queries amongst separating and divorcing couples so you can enter the next chapter of your life with complete clarity.

What are the rules for divorcing couples?

Contrary to popular belief, there are no set rules for who gets the house should you choose to divorce or dissolve your partnership. Mediation is in fact the key to negotiating the best outcome for all in accordance with your circumstances. If both parties are amicable and can mediate privately, a draft consent order should be completed and submitted.

A consent order will stipulate the agreement that has been reached for the division of both money and property. Once approved by the court, this document becomes legally binding.

Is selling the family home the only option?

In short, no. While one of the main options, selling your home and splitting the proceeds is not the only choice for divorcing or dissolving couples. You can buy out your partner or vice versa to transfer property ownership and cut ties. 

You can also choose to preserve the current ownership status of the property with just one of you continuing to live in the family home. This is common amongst couples who share children. Most pursuing this option wait until the children turn 18 to sell the home and split the proceeds accordingly. Until this point, both partners remain liable for the property’s mortgage debt.

What if I purchased my property with government help?

If you purchased your property using a government-backed home buying initiative, such as the Help to Buy Scheme, you’ll have another task to complete if you wish for ownership to be transferred in the event of a divorce or dissolution. We’ll let Stowe Family Law explain more:

“If you brought your property with the assistance of the Help to Buy Scheme with your spouse, you must remember that you require the Scheme’s authority for only one party to be released from the agreement, which is vital if you are considering making/ accepting an offer to transfer the property to one or other of your sole names.”

We jointly owned a leasehold property, how do my options differ?

Owners of leasehold properties considering divorce or dissolution should take extra advice regarding their lease. As with freehold properties, a clear understanding of your property’s current value is integral to negotiations and can give you the information to proceed down the road that is best for your circumstances.

Do I need to inform my lender that we are separating?

Your mortgage lender should be informed of any changes to your circumstances, especially if you intend to take over the ownership of the property by yourself. For a transfer of equity to be granted, the partner remaining at the property and retaining ownership must be able to prove that they can afford to single-handedly pay the mortgage.

I am not the legal owner of the property, what are my rights?

If the family home is owned by just one of you, you can still safeguard your rights to the property. The first step is registering a matrimonial home rights notice with HM Land Registry. This is free to do, and will protect your position and prevent the sale or remortgaging of the property while assets are being divided.