property divorce

For many couples who are looking to separate, the family property will be the most valuable asset to divide between them. How do you move financial matters forward, then, when the value of the family home is so uncertain in the current economic climate?

It is important to note that the majority of valuations cannot take place at present, due to Coronavirus and the current lockdown. Increasingly however, there is a suggestion that this may change in the near future, and valuations of land are generally going ahead more or less as usual.

Can you still value property during the Coronavirus pandemic?

In cases where the valuer has been able to attend the property immediately prior to the lockdown, valuations are generally being taken as applicable prior to the pandemic, with the caveat that prices may or may not fluctuate as a result of recent events. Nevertheless, the resolution of financial matters does not have to be paused pending a valuation – progress is not necessarily dependent upon the value of the family home being agreed.

How are property prices being affected by the Coronavirus?

While it is widely reported that property prices are expected to fall as a result of the pandemic – and lenders have generally been more reluctant to lend as a result – there are suggestions that this might not apply uniformly across the country and across the housing market. For example, some valuers are suggesting that properties in more rural parts of the country, the South West included, are likely to be impacted less, if at all, as people in cities re-evaluate their priorities during lockdown. It is thought that this could be particularly relevant for larger, more valuable properties, and those with big gardens and/or land attached to them. Indeed, some valuers are predicting that property prices may increase in rural areas as a result of demand for rural properties increasing.

In some ways, even if prices do fall, provided that you are selling the family home (or selling your share of the family home to your spouse) and purchasing a new property in the same market, a reduction in the value of the family home does not have to be a significant issue – you are buying a property when property prices are potentially low as well.

What if you’re selling your property due to divorce?

The Courts will be concerned whether or not you and your ex-spouse are able to meet your respective future financial needs. It would therefore be relevant that the value of alternative properties, which it may be appropriate for you or your spouse to purchase, have also decreased.

There are a number of ways in which a property can be dealt with in a financial settlement. Neither spouse has the power to force the other to sell a property in joint names in the absence of a Court order, but of course this can be mutually agreed, and the timing of the sale can also be agreed. It might be that one spouse moves out of the family home, for example, and it is decided that the family home will be sold in 12 months’ time when the market may have stabilised.

Alternatively, if there is sufficient capital to do so, the party leaving the family home may decide that they would prefer that their share of the equity in the family home remain invested in the property for a specified period, in order to maximise their return.

The most appropriate way forward will be dependent on a huge variety of factors, including the respective capital and income needs of you and your spouse (and your children) and the other assets available to each of you.

Obtaining independent legal advice as early as possible will give you the best opportunity to explore the options and decide the most practical way forward for you and your family.