For most couples, the family home is the most significant asset they own together and deciding what happens to it is often the most difficult part of reaching a financial settlement. There is no single answer that applies to every situation. The outcome depends on your individual circumstances, any children involved, and what both parties can realistically afford.
Here we set out the main options and the factors that tend to influence how courts approach the family home in divorce proceedings.
The main options for the family home
When a couple divorces, there are broadly four ways the family home can be dealt with:
Sell the property and divide the proceeds. This is the most straightforward outcome and the most common. The net proceeds after paying off any mortgage are divided between the parties, either equally or in proportions agreed between them or ordered by the court.
One party buys out the other. If one party wants to remain in the property and can afford to do so, they may be able to take on the mortgage alone and pay the other party their share of the equity. This requires the lender’s agreement to remove the other party from the mortgage, which is not always straightforward.
Defer the sale. In some cases – particularly where there are children – the court may make a Mesher Order, which allows one party (usually the primary carer of the children) to remain in the property until a future trigger event, such as the youngest child reaching 18 or the resident party remarrying. The property is then sold and the proceeds divided.
Transfer the property. In some circumstances the court may order the property to be transferred entirely to one party, typically where the other party has a significantly stronger financial position or where the needs of the children make it appropriate.
How do courts decide?
If a couple cannot reach agreement on what should happen to the family home, a court will decide based on the factors set out in the Matrimonial Causes Act 1973. These include:
- The financial needs, obligations and resources of each party
- The standard of living enjoyed during the marriage
- The ages of the parties and length of the marriage
- Any physical or mental disabilities
- The welfare of any children under 18
- Each party’s contributions to the family, including non-financial contributions such as caring for children
The needs of any dependent children will always be a significant consideration. Courts will generally prioritise ensuring that children have a stable home, even if this means one party receives a larger share of the equity.
What if the home is in one person’s name?
Ownership of the property in one person’s name alone does not necessarily determine the outcome. The court has wide powers to make orders in relation to matrimonial assets regardless of who holds the legal title. If you have contributed to the property – financially or otherwise – you are likely to have an interest in it even if your name is not on the deeds.
It is also important to register your home rights with HM Land Registry if your name is not on the title, as this prevents the other party from selling or remortgaging the property without your knowledge.
What about the mortgage?
The mortgage does not automatically transfer when a property is transferred to one party. The lender must agree to remove one party from the mortgage and will assess whether the remaining party can afford the repayments alone. If the lender does not agree, selling the property may be the only realistic option.
Until any financial order is in place, both parties remain liable for the mortgage regardless of who is living in the property. Falling into arrears can significantly complicate settlement negotiations, so it is important to keep up with payments even during a difficult separation.
Can we agree between ourselves?
Yes and in most cases this is preferable to leaving the decision to a court. Reaching an agreement through negotiation or mediation gives both parties more control over the outcome and is usually quicker and less expensive than contested proceedings.
Any agreement reached should be formalised in a consent order approved by the court. Without a court order, either party could make a financial claim against the other in the future, even after divorce. A consent order makes the agreement legally binding and provides certainty for both parties.
Get advice from Oxford family law solicitors
Decisions about the family home in a divorce can have long-lasting financial consequences. Taking early legal advice helps you understand your options, protect your position and reach a fair outcome as efficiently as possible.
At Challenor Gardiner our family law solicitors in Oxford offer a fixed-price initial consultation of up to one hour for £150 + VAT. All initial enquiries are without cost or obligation.
Call us on 01865 721451, email info@challenor-gardiner.co.uk or contact us online.