More ex-couples are being forced to stay together under one roof as the credit crunch bites – even after they have divorced.  Solicitors say a growing number of separated couples are being forced to remain living together as negative equity and limited mortgage deals bring the housing market to a standstill. The situation is far from ideal for couples whose relationship has broken down but who are trapped together in the former marital home until a buyer can be found. Tensions can mount and arguments escalate which can make for a miserable time for both parties and their children.

So what can you do if you need to live separately but money is tight?

Have you considered transferring the mortgage to an interest only basis? This can create extra funds to allow one party to rent privately until the marital home is sold. Can one party lodge with family or friends? This can be a cheaper option than renting privately and the family may even let you stay with them for free. These are of course only short-term solutions but may allow some breathing space until the family home is sold or finances improve.


A more long-term solution is to consider if one party can buy the other out. Unfortunately it is often the case that neither party can raise enough money to buy out the other completely. If however one party can raise even a small lump sum, it may be enough to allow the other to move out. The marital home can then be transferred and the other party given a deferred interest to reflect the balance due to them. Take the example of David and Victoria who are separating. The equity in their property is about £100,000.00 and it is agreed that David will receive 40% of that equity i.e. £40,000.00. Victoria works part time but can only borrow  £10,000.00 from her family. So the property is transferred into Victoria’s sole name and David has a deferred interest of 30% (£30,000.00 at this point) and will receive his share at some point in the future e.g. if Victoria remarries or cohabits or when the children are independent. David also receives the £10,000.00 lump sum, which allows him to either rent privately or use the funds as a deposit to purchase a property if he can raise a sufficient mortgage.  


Some separating couples are lucky enough to find a buyer for their home but are often forced to sell at a much lower price than anticipated which means less cash for both parties to re-house. With banks requiring larger deposits to buy, what can you do if you want to get back on the property ladder but don’t have enough for the deposit or have the deposit but can’t get a sufficient mortgage to buy?  One possibility is to consider a shared equity scheme through a Housing Association. You put down a lump sum and own a percentage of the property. The remaining percentage is owned by the Housing Association and you pay rent that on that part. If the property increases in value, so will your percentage so you are still on the “ property ladder”. Details of local Housing Associations can be found in the telephone directory or Internet.  It may also be worthwhile considering whether there are friends or family who would be willing to buy with you? Sometimes an adult child who is working (and therefore has a mortgage capacity) but still living at home is prepared to buy a property jointly with one parent or buy an interest in the family home. Would your mother or father or even great aunt Alice be prepared to release equity from their property to give you a deposit to get you back on the property ladder?

Another problem for divorcing couples living under the same roof is real financial hardship for a spouse who doesn’t work or earns significantly less than their other half.   Unless a person can prove to the Benefits Agency that they are living completely separate lives, they may find it difficult to claim benefits. Finding a solution that allows a couple to live separately can mean that one or both may become eligible for benefits, which may improve their standard of living and housing prospects generally.

Unfortunately some couples are simply unable to raise even a small lump, family and friends cannot help and the mortgage is already interest only. Probably one of the most frequently asked questions of a divorce lawyer is “ can I get him or her out of the house now?”. The answer is that without going to Court for an Injunction Order where there has been violence or the threat of violence, they cannot get their spouse out of the house unless the spouse agrees to go. It is also worth noting that even if the spouse moves out temporarily, they are legally entitled to return and occupy the property at any time – so locks cannot be changed to exclude them. If the couple are married, this applies even if the marital home is owned solely by one party.  On the other side of the coin, if you do decide to move out, you will not lose your financial interest in the property even though you are no longer living there.

An injunction which restricts a person’s right to enter and occupy their own home is known as an Occupation Order. Not surprisingly, the court do not make such orders lightly and there needs to be a significant risk of harm to the other spouse or the children before the court would consider doing so. The court must consider the housing needs, the financial resources and the effect of any decision it makes on the parties and any children as well the conduct of each party towards the other and generally. An Occupation Order can also require one party to permit the other to enter and occupy the property or regulate the occupation of the property by one or both parties. In an ideal world, a couple whose relationship has broken down would be able to afford to separate immediately. These days it is so often not the case and the tensions of living together can sadly result in behaviour by one party that entitles the other to an Occupation Order. It is therefore worthwhile considering all the options available to allow a couple to live separately when their relationship has broken down. Living separately can diffuse the tension between a couple at this very difficult time and anything that keeps the situation amicable can only be to the benefit of all concerned especially any children.


So if you manage to reach an agreement with your spouse regarding the home, even if you cannot sell it now, how do you make it a binding agreement and protect yourself in case they change their mind in the future? If you are divorcing, it is wise to obtain a court order which sets of the financial agreement between you. If the order is made by consent, it is known as a Consent Order. For example in the case of David and Victoria, the order would state that the marital home is transferred to Victoria and that David would receive a lump sum of £10,000.00 and have a deferred charge against the property to secure a lump sum equal to 30% of the equity. The order could also deal with maintenance for Victoria and the children ( if agreed), the division of the contents of the home and possibly any pension sharing agreements. Even if you are waiting for a buyer for the family home, it is worthwhile reaching an agreement with your spouse about what will happen when a buyer is found. A Consent Order can set out how the proceeds will be divided when the property eventually sells and provide some certainty until that time arrives.

It is worth noting that a Consent Order requires divorce proceedings. If you are only separating ( and do not wish to divorce until some point in the future) but want to resolve the financial issues, a Separation Agreement can be drawn up which sets out the financial agreement between you and your spouse regarding the house, maintenance and other financial issues. However while a Separation Agreement is evidence of the agreement between you, it is not as “water tight” as a court order. It is nonetheless evidence of the agreement reached with your spouse and provided it is properly drafted and each party has independent legal advice, can  provide some protection should one party seek to renege on the original agreement.


One thing is very certain, careful financial and legal advice is essential in such challenging situations.

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