Who keeps the house in a divorce?

Article published on the Amicable Divorce Network's website, May 2024

The family home is often one of the most contentious marital assets during divorce. This is partly because it is usually the most valuable asset a family possesses, but also because of the sentimental value that is attached to it. Many homes are full of memories and childhood tokens that can be very comforting at a time of major change. It is quite common in this context for one of the parents, most often the wife, to make remaining in the house one of her priorities when negotiating the divorce settlement. Because there is no steadfast rule with regards to who keeps the family house, this emotional attachment becomes a major factor in determining the financial arrangements, sometimes to the detriment of other financial assets that could be obtained.

In this article, I wanted to lay out all the considerations that need to be made when deciding whether keeping the house at all costs is the best approach. Each situation will be different, and every individual’s decision will be based on their own set of circumstances. But it is essential to ensure that all the implications of the decision have been taken into account from the start.

The advantages to keeping the family home

The most common driver behind the objective of keeping the family home relates to the stability of the children. At a time when everything is changing and uncertainty reigns, as a parent you probably seek to preserve as much familiarity as possible in your children’s lives. It is true that they are absorbing a large amount of volatility and that keeping some things steady often helps with the transition. Your family may have never lived in another house or known another bedroom. If your children are very young, this will probably have less meaning. However, teenagers might feel particularly attached to this familiar space. Furthermore, moving houses can often require changing schools, which creates yet more turmoil for the children, ripping them out of their habitual social circle and environment at a time when they are already having to settle into a new reality.

The other advantage of staying in the family home, is the fact that it removes yet another stress in your life: that of finding a new home, arranging a move and settling into a new residence. There are already so many things to deal with during a divorce, and the experience is often so stressful, that the last thing you would want is yet another stressful change to manage. Staying in the family home will give you something steady to hang on to while your world is being turned upside down.

Last but not least, depending on the family’s involvement in the local community, moving houses can lead to a breaking of community bonds which are particularly important during a divorce. Having your friends and family nearby, knowing your neighbours and your local shop keepers are all elements of comfort which are welcomed during this life transition.

The challenges of staying in the family home

There is an obvious financial implication linked to keeping the family house as a single income household. If you are the parent who is hoping to stay in the house, you should always do some proper budgeting before making the decision, to ensure you can afford to pay the mortgage (or rent) and maintain the house on your own. A thorough understanding of all costs and expenses relating to the house, on a monthly basis, will allow you to gain clarity as to whether the numbers add up in your favour or not. You may decide to sacrifice other expenses to make your budget work, but this needs to be carefully considered to ensure it provides a viable setup. The downside of keeping the family home can often be that you may find yourself cash poor, owning a nice property but not being able to afford anything else, including things that contribute to your personal wellbeing such as holidays, hobbies and restaurants. It may also mean that you have to take on new responsibilities which you are not used to shouldering on your own: dealing with roof leaks, fixing plugged up sinks or mowing the lawn are some typical examples. While all of these are skills that can be acquired over time, they do add to the mental charge and expenses of maintaining a family residence.

On the other hand, leaving the past behind and starting afresh in a new home may offer some advantages. It creates a distinct “before and after” break point and can help with emotional healing and recovery. Sometimes, staying in a house full of memories, acquired at a time when you thought you would be living happily-ever-after with your spouse, can create a recurring heartbreak and prevent you from moving on. A fresh start in a new residence that has been chosen and decorated without the involvement of your ex, creates a better context for a new beginning than the continuity that comes from staying in the same home. If you are the one staying in the home, but are struggling to accept the divorce or still grieving the relationship, a move to a new home might be worth considering for your mental wellbeing.

Common errors to avoid

Given the pros and cons mentioned above, it is not uncommon for divorcing individuals to make the wrong decision with regards to the house. This is yet another example where letting your emotions dictate your decisions can be dangerous and unwise. When emotions run high, intelligence often runs low. To avoid this pitfall, the decision needs to be approached as a business transaction, considering the financial and logistical implications of moving vs staying. One of the most common errors that you might make due to your emotional attachment to the family residence is that you are setting yourself up for significant financial challenges in the future. If you are truly willing to give up everything else to keep the house, you may end up foregoing important sources of income in later life, such as pension shares. This might be an acceptable decision if you are still young or have a large pension of your own, but such a decision definitely needs to be explored in depth with the support of a financial advisor. The priority here will be to avoid ending up strapped for cash during retirement. With life expectancy increasing year or year, long term financial health is not something to be ignored. Predictable variations in the value of the property should also be considered as well as how much mortgage remains to be paid.

If you have come to the conclusion that keeping the family home is indeed the right thing for you to prioritise, there are many creative solutions that can help limit the financial impact of such a decision. Some couples agree that ownership will sit solely with one of the spouses, but the other will be able to stay in the house with the children until they go to university. This can be in lieu of child maintenance for example, or in exchange for a monthly rent. There is also an arrangement called a Mesher Order (or order for deferred sale) which means the house remains joint property, with one party staying in occupation of the residence until an agreed trigger event or predefined date allows it to be put on the market. Yet another option is what is commonly referred to as “nesting”, where the parents take turns living in the house with the children so the children don’t have to move back and forth between two homes. The main takeaway here is that couples and divorce professionals can be creative when it comes to finding ways to make the arrangement work for everyone. There does not need to be a simple binary decision, where either one or the other parent keeps the house. In the current economic climate and given the unusually high interests rates, it often the case that neither spouse can afford to buy out the other’s share in order to stay in the house. The key is to recognise that a more flexible arrangement is required because a traditional buy-out approach isn’t a viable solution.

As we’ve just seen, the question of the family property can be a particularly tricky one. Each person will have to weigh the pros and cons of staying or leaving based on their specific set of circumstances and financial ability to stay. There is really no right or wrong in this matter, it all comes down to having fully considered the implications of one decision or the other. My main piece of advice for this is to try to approach the situation in an objective and factual way, in order to avoid creating a financially unsustainable future.