Although the press is reporting a slowdown in the UK housing market, in some areas already expensive properties continue to increase in price. At the same time, rental prices are rapidly increasing as demand grows. As we look after our clients’ properties as well as their finances on separation and family arrangements, we thought we should look how high house prices affect divorcing couples.
The decision of where to live is a huge factor in a divorce. Historically, a couple would likely sell one property to fund two new homes, or one spouse would receive a portion of the equity in the financial settlement so they could finance the purchase of a new home while their former partner continued to live in the matrimonial home.
However, with prices on the increase in our more desirable neighbourhoods, many are having to find alternative living arrangements. These could involve moving in with family or friends. Some even concede that they will have to continue to live with their soon-to-be-ex-spouses which, as you can imagine, adds considerable additional stress to the divorce.
Alternatively, even if the money for a deposit or even purchase is available, there may be a need to move to a less desirable neighbourhood or out of area completely. If there are children involved in the divorce, this could significantly impair that parent’s access to their children which again will only add stress into an already fraught situation.
All of points covered above will of course have a significant impact on divorcing couples. However, there are other legal aspects a divorcing couple should also consider. These include:
How the marital home and other properties are divided in the financial settlement.
Higher house prices can complicate this process even further, especially as the home is likely to be the couple’s most expensive asset. This means it is highly likely there will be some disagreement as to which party should get what share.
How the value of the house will affect the other aspects of the financial settlement.
The value of the marital home will affect a couple’s overall financial situation. As a result, it will have a direct bearing on maintenance and any other ongoing financial arrangements.
Custody (Child) arrangements.
If one parent is forced to move out but left unable to buy or rent in the same area, this will impact on the practicalities of any child arrangements.
Increased legal costs.
When the price of the property involved is disputed and valuations are needed, this could lead to protracted negotiations, the associated legal costs will increase because the parties will need more legal support.
Will there be an impact on either party’s standard of living?
Having to pay more for a new home could very well impact the money that party has available for their other living expenses. This will directly impact their standard of living.
Will high house prices affect the couple’s mental health?
Divorce is stressful. However, if the dispute over the value of the marital property is particularly fierce, it will drastically increase the stress both parties feel.
Ultimately, the choice as to what a divorcing couple will do in terms of finding new homes lies with them, even though it will be heavily influenced by their financial resources. However, it is highly likely that both UK property and rental market prices will place even greater strain on these resources. If you are planning to separate and would like to discuss any of the issues outlined above, please contact Andaleeb Khandaker.
Similarly, if you are going through a divorce and would like us to make selling your matrimonial home or buying a new home as easy as possible so that you have one less thing to worry about, please contact Jeremy Tulloch .