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If you’ve recently separated from your partner, you’re likely to be feeling a whole range of emotions. You may be feeling daunted at the prospect of starting again and confused about your next steps. If you own a property together this can present extra challenges, therefore it’s important to understand all options available to you.

Whether you’re considering selling your existing property or exploring the option of one party buying out the other, it’s crucial to navigate these decisions with clarity and awareness. In this guide, we’ll break down key considerations if you are newly separated and deciding what to do about your shared property.

 

Things to Consider When Moving Homes After a Separation

Determining the Value of Your Property

Before making any decisions, it’s essential to establish the current market value of your property. Seek the expertise of a qualified chartered surveyor or local estate agents to conduct the property valuations (it is often advised to get at least three agent valuations and take an average as they can vary). This valuation will serve as a baseline for any negotiations required and the decisions regarding the property’s future.

 

Options for Jointly Owned Property

Buyout Option: One party may choose to buy out the other’s share in the property. This requires a fair assessment of the property’s value, and the buying party needs to secure the necessary financing for the buyout. This is known as a ‘transfer of equity.’

Selling the Property: If neither of you wishes to keep the property, selling it may be the viable option. The proceeds from the sale can be divided in accordance with the agreement reached between yourselves.
If you are struggling to reach an agreement, it is advisable to speak to a family lawyer who can advise you of your options.

 

New Property Considerations

a. Mortgage Affordability: When looking for a new property, it’s crucial to assess your mortgage eligibility. Lenders consider various factors, including the size of your deposit, income, credit history, and existing financial commitments. Speak with a mortgage advisor to understand your borrowing capacity. It is also worth considering whether one party will keep your existing mortgage product rather than terminating the mortgage early, which could potentially incur an early redemption fee. Again, speak to a mortgage adviser to understand your options.

b. Downsizing: Given the change in circumstances, downsizing may be a practical choice. Consider your current and future needs when deciding on the size of your new property. We’ve written more about downsizing in this blog.

c. Equity Released from the Sale or Transfer of Equity: If selling the existing property generates surplus funds, understand how much equity you can take out. This can be used for a deposit on the new property or to settle financial matters related to the separation. A family lawyer will be able to advise you on where you stand relating to how much of the equity you may be entitled to.

d. Shared Ownership: In some cases, shared ownership may be a suitable option for your circumstances. This involves buying a share of a property and paying rent on the remaining share. Shared ownership schemes are facilitated by housing associations.

 

Legal Considerations

a. Property Ownership Agreement: If no formal agreement exists, we would strongly advise you to seek legal advice from a family lawyer to navigate the separation and property division.

b. Stamp Duty: Be aware of stamp duty implications when purchasing a new property. Changes in ownership may have stamp duty implications, and it’s essential to factor these costs into your budget.

c. Legal Advice: Consult with a family law solicitor who can provide guidance on your rights, responsibilities, and legal obligations throughout the process.

 

A brighter future

Navigating the complexities of property matters after a separation requires careful consideration, open communication, and professional guidance. By understanding the options available and seeking expert advice, you can make informed decisions that set the foundation for a stable and secure future. Remember, you’re not alone in this journey and while it can seem daunting, it can be exciting too. Once you are aware of your options, you can start planning your fresh start, whether that be in your current home or in a new property.

At Clarity, our friendly team are experienced in working with couples who have separated and are selling their home. We’ll work with both parties to ensure your house sale runs as smoothly as possible and maintain communication between all parties to avoid unnecessary delays. We can also help you with the conveyancing process, should you decide to move to a new home.

Looking for some legal advice?

If you’re planning to sell your home, our experienced and friendly team at Clarity would be delighted to help take the stress out of your move. We have offices in Northampton and Milton Keynes and serve the surrounding areas.