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Family breakup may force the sale of the family home, but there are alternatives. Photograph: Alamy
Family breakup may force the sale of the family home, but there are alternatives. Photograph: Alamy

Divorce: what happens to the family home?

This article is more than 11 years old
When married couples decide to split up, there are options over how they can divide what is typically their main asset

"The family home has a special place in any family and in many cases it is the major family asset," says solicitor advocate Ursula Rice. So it's little wonder that when a family breaks down, property will be central to a divorce settlement. What happens to an existing home and where one or both partners go next will depend on the divorcing couple.

All assets will need to be identified and valued as part of the process of working out what there is to divide up. The home and any other properties will be included in this – regardless of whose name the property is in. "There is no formula in this country setting out how assets are to be split on divorce," says Nigel Shepherd, a partner and family and collaborative lawyer for law firm Mills & Reeve. "There's a broad starting point of 50:50 but we look at a series of different factors to try to get to an outcome that meets the needs of the couple and, in particular, any children and is broadly fair (although one person's fair is often the other's unfair)."

Paul Lancaster, a partner at law firm Blacks Solicitors specialising in family, mediation and collaborative law, says one spouse could buy the other out and keep the house or the property could be sold and the proceeds divided. If there are children, a parent will often want to stay put to maintain as much continuity as possible. When this is the case, the other partner may receive other assets to even up the distribution, or may agree to defer receiving the balance until the property is sold when the children move out or the partner remarries. This is commonly known as a Mesher Order.

"The downside with a traditional Mesher Order is that both parties then remain on the mortgage which often makes it very difficult for the person who has moved out to obtain another mortgage to buy somewhere else," says Lancaster. "A more complicated form of Mesher Order, therefore, involves the transfer of the house and the mortgage into the name of the primary carer but with the other spouse retaining a percentage interest in the house secured by way of a second mortgage in their favour. This is known as a deferred charge Mesher."

Valuing the property

Whatever option is chosen, the property will need to be valued for the settlement. If a couple can't agree upon a value, the court will order a joint report from a local estate agent or surveyor. "They will be instructed by the parties jointly and they have a duty to the court to report accurately," says Lancaster. "The figure given will be a market valuation, ie what the expert thinks the property would sell for rather than a suggested asking price."

Valuations can be updated if there is a significant fall or rise in the market, but Lancaster says changes in prices can be factored in from the start.

Registered owners

"Marrying or divorcing does not alter your 'face value' property rights – it doesn't change who owns what at the Land Registry – but being married creates obligations to each other," says Rice. As a result, the court has the power to make orders against any property, regardless of how it is owned. "Even if a house is only in the name of one spouse, if it is the marital home the other has a legal right of occupation for as long as they remain married to each other," says Lancaster. "It would be unusual for each party not to receive at least some share of the equity even if the house was only in the name of one of them."

He advised that after a marriage breakdown, a partner who lived in a house which was in the sole name of his or her spouse should act quickly: "You should protect your position as soon as possible by entering a Notice of Home Rights against the property with the Land Registry. This should prevent your spouse from selling the property without your knowledge or consent whilst you remain married."

Moving on

If you do not have children, or you have decided the best option is to sell the family home, this may bring added problems.

Selling a property in the current market can be difficult – in some parts of the country house sales are very slow. This leaves you with a choice of holding onto a home you no longer want, or reducing your price for a quick sale. "The difficulties can start with the sale of the family home with perhaps one party more reluctant than the other to sell, and both parties wanting to sell for a good price as they consider the finances of their next purchase," says George Barkes of Stacks Property Search.

The finances may be difficult. You may only have half the money to spend – depending on whether there are dependant children – and you may struggle to raise a large mortgage on your income.

Even if you are receiving regular maintenance from your ex-partner, you will need to search carefully for a lender willing to take it into account. "Lenders have very different ways of treating maintenance payments," says Jonathan Harris, director of mortgage broker Anderson Harris. He says some, including Clydesdale bank and Coventry building society, will not take them into account at all, some will only accept a percentage of the payments and some, including Nationwide and Skipton building societies, will accept 100% of payments as income.

However, Barkes says the state of the property market may help you as a buyer. "The current property market, where prices are either flat or on a downward trend, actually plays into the hands of those going through a divorce," he says. "I would strongly suggest that newly single purchasers consider renting in the short term, and to be able to do this without the pressure of having to get back into a runaway market is at least one piece of good news."

More on this story

More on this story

  • Getting divorced in 2013

  • Adultery falls behind bad behaviour as leading grounds for divorce

  • Money and children after a divorce

  • How to cut the costs of getting divorced

  • Trapped: the former couples who can't afford to move on

  • 'Richest divorcees' is a list too far for the Sunday Times

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