Brokers noticing a surge in divorcees struggling to buy partners out of their homes.

We have certainly noticed an increase in clients asking about their mortgage options and struggling to meet affordability to buy their partners out. They’re coming off low fixed rates and onto products maybe 3% or 4% higher that are simply not affordable to them on one income, especially when taking into account the general increase in living costs from rising inflation. As a result, they are opting to downsize which then adds pressure to the smaller homes at the lower end of the market.

It’s normally January when we see the post-Christmas spike of family breakdowns so let’s hope this doesn’t lead to a bidding war between first-time buyers and divorcees trying to find more affordable housing.

We are getting a lot more enquireies from parties who are divorcing and exploring their options, parties who are wanting to stay in their marital home but sadly with houses now being bought utilising both parties finances its often not possible.
Help to buy has also caused issues with this as removing a party from the scheme and drastically limiting the number of lenders who they can use that would accept help to buy, and in a situation like that it could be limiting just the one lender that they needed for affordability and criteria.

There is always a significant ballooning of divorce enquires after christmas and the summer holidays, extended periods of time with the family cause arguments or secrets find their way of coming to the surface.

Divorcee's are being hit harder than anyone. Facing the prospect of refinancing or buying properties at still-inflated prices from the stamp-duty-holiday-era buying frenzy. Trying to do so using a fraction of their old household income amidst soaring living costs, mortgage rates and stingier mortgage affordability for a typical single household income compared to a year ago. There are solutions though if you look hard enough. Lenders such as Suffolk building society can use child maintenance, universal credit and other government benefits with just one month's payment history (whereas many need 3 months plus). Should you not be able to borrow enough to fully buy out your ex, they also allow a second charge in your ex's favour for the residual equity they have rights to. Alternatively if you are fortunate enough to have a £60k plus income there are new lenders like Perenna who can lend 6 times income fairly reliably. Speaking to a good broker can potentially get you back on track.

As specialists in divorce cases & capacity reports, we see this quite commonly, couples have bought with joint income, quite often had children which reduces borrowing capacity, often followed by a reduction in hours for one parent, then on divorce the situation looks very different to when they purchased. This coupled with rising rates makes it very difficult for to buy out partners on divorce.

Ever greater numbers of seperating or divorcing couples are finding they need to sell the family home, as neither party can afford to buy the other out on their sole income. This means first-time buyers are facing increased competition as they are up against buyers with much larger deposits. Just another unintended consequence of two decades of humanity-free housing policy.

Without question, it's currently incredibly difficult for divorcing couples to both stay on the property ladder. Not only are they often going through emotional turmoil the financial side of it compounds their misery. Trying to remain in the family home, or buy a new one, on a sole income, often with new child maintenance payments if they're a parent, is tricky.
We've seen more and more divorcees have no choice but to go down the shared ownership route to remain on the property ladder.