Navigating the Sale of the Family Home During Divorce

The average divorce rate in England and Wales is 33.3%, based on all marriages over 50+ years, according to the latest Office for National Statistics data [1]. Divorce is a challenging period for all parties involved, affecting emotional well-being and financial stability alike. One of the most pressing decisions to make during this time is what to do with the family home.

Selling a property is never straightforward, but a divorce becomes a daunting task due to emotional upheaval, financial concerns, and the impact on children. The emotional turmoil can cloud judgement, financial intricacies could lead to unforeseen losses, and the change in living circumstances can have a lasting impact on the children’s lives.

We’re here to provide a comprehensive overview, focusing on the logistical, financial, and emotional considerations that come into play.

The Emotional Aspect

Divorce brings emotional upheaval, and the shared home often carries sentimental value. While emotional attachment is natural, it’s essential to separate feelings from practical concerns. The house is a significant asset in your joint financial portfolio.

The Financial Aspect

For many, selling the home becomes a financial necessity during divorce. The proceeds can be distributed as part of the divorce settlement, although it’s crucial to consult financial and legal advisers to fully understand the implications. These considerations include potential costs, how the proceeds will be divided, and other financial implications.

Home Equity and Mortgage

Understanding the current value of your home and the remaining mortgage balance is vital. This information helps set an appropriate selling price and gauges how much equity can be distributed between both parties. During a divorce, you have several options regarding the family home: sell it and share the proceeds, one party buys the other out, keep the home with one party residing, or transfer a portion of the home’s value as part of the financial settlement [2]. It’s advisable to consult with a mortgage adviser to receive tailored advice for your unique circumstances.

Costs of Sale

Selling a property incurs various fees, including estate agent commissions, legal costs, and potential home repair expenses to prepare the home for sale. Both parties should consider these expenses, as they will affect the net proceeds from the sale. It’s also advisable to account for any mortgage penalties or additional charges tied to the home sale.

Tax Implications

Capital gains tax may apply to profits made from the sale of your home, although certain reliefs and exemptions might be available. Consulting a tax adviser will provide you with specific guidance tailored to your situation.

The rate of capital gains tax depends on your income tax band, either 18% for basic rate taxpayers or 28% for higher or additional rate taxpayers. It is calculated on the profit made from the sale, after deducting the purchase price and associated selling costs. However, you may qualify for Principal Private Residence Relief if the home was your main residence.

Credit Score Impact

Maintaining timely mortgage payments, even after separation, so as not to impact your credit rating. Divorce can affect your credit rating in other ways, such as joint debts, shared credit accounts, or if a spouse defaults on shared loans. It’s crucial to separate financial responsibilities as early as possible, and to communicate with lenders about the divorce. This is especially important if you plan to take on a new mortgage after the divorce. Monitoring your credit report throughout the divorce process can help ensure your credit remains intact, making the transition to financial independence smoother.

Legal Obligations and Entitlements

In the UK, marital property is generally subject to equitable distribution, which means the court strives for a fair division rather than an equal one. Several factors are taken into account, such as the length of the marriage, each spouse’s financial and non-financial contributions, and the needs of any children. Prenuptial agreements or significant contributions to the home by one party can also significantly influence the distribution.

Timing and Market Conditions

Consulting a mortgage adviser and researching current housing market conditions in your area are important steps. These actions will help set a realistic selling price and understand how long it may take to sell the home, ensuring you are better informed when making decisions.

Settlement and Division of Proceeds

Legal advice is crucial to ensure an equitable division according to UK law or any prenuptial agreements. Mediation can also be a constructive way to resolve disputes over the division of assets, providing a platform for dialogue and negotiation.

Consider the Children

The sale of the family home during a divorce can be particularly challenging when children are involved, as it may disrupt their sense of stability, schooling, and social life. As parents, it’s important to always prioritise your children’s needs during a divorce. This includes trying to disrupt them as little as possible [2].
It’s crucial to discuss the sale with them and acknowledge their feelings. The timing of the sale and the choice of a new residence should be orchestrated to reduce the emotional impact on them. Consulting with family therapists and seeking legal advice on custody arrangements before selling the home can be sensible steps to ensure that the children’s well-being is prioritised during this challenging transition.

Considering Renting as an Alternative

In some instances, the immediate sale of the family home may not be the most advantageous route. Renting out the property can provide a steady income stream, offering some financial stability. However, it also comes with additional responsibilities, such as property management, maintenance, and tax compliance. Becoming a landlord may require a time commitment and a good understanding of legal obligations towards tenants. Employing a property management company could alleviate some of these burdens and ensure professional handling of the property, although it would incur additional costs.

The Importance of Professional Advice

When going through a divorce, it can be easy to overlook the finer details, especially when it comes to the division of assets and finances. Seeking advice from a qualified financial adviser is essential for navigating the complex landscape of pensions, investments, and other financial products that may be impacted by a divorce.

Navigating the sale of the family home amid a divorce is a complex and emotionally taxing process. By arming yourself with the right information and advice, you can make the journey smoother and more manageable. From the hidden costs of selling to the tax implications, and from safeguarding your credit score to understanding your legal rights, comprehensive planning is key to ensuring you emerge financially stable and ready for life’s next chapter.


Status Mortgage Services is a trading style of Status Financial Services Limited which is an appointed representative of The Openwork Partnership, a trading style of Openwork Limited which is authorised and regulated by the Financial Conduct Authority.

Approved by The Openwork Partnership on 18/10/2023

HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.

This article is for guidance purposes only and does not constitute advice.


[1] Nimble Fins – Divorce Statistics UK 2023 – June 2023

[2] MoneyHelper – Dividing the family home and mortgage during divorce or dissolution