Selling a House After Divorce: What You Need to Know

Going through a divorce is one of life's most stressful experiences — and deciding what to do with the family home can be one of the hardest decisions you'll face. Whether you're looking to sell up, stay put, or buy your partner out, understanding your options early on can help protect your financial position and make the process as smooth as possible.

At Mortgage Tree, we're independent mortgage brokers. We can't advise you on the legal side of divorce, but when it comes to the mortgage implications of any decision you make about the family home, we're here to help. This guide outlines your main options and the key things to be aware of.

💡 Mortgage Tree Tip:

Whatever route you take with the family home, the mortgage implications can be significant — and often overlooked. Speaking to an independent mortgage broker early in the process can help you understand what you can afford, what lenders will consider, and how to protect your credit position during a difficult time.

Your Three Main Options

When it comes to the family home during a divorce, most couples fall into one of three situations:

1.  Sell up and divide the proceeds

Both partners agree to sell the property and split the proceeds in line with the divorce settlement. This is often the cleanest option financially, giving both parties a clear break and capital to put towards their next home. Your mortgage broker can help you understand what you might be able to borrow for a new purchase once the sale completes.

2.  Defer the sale (often where children are involved)

Sometimes called a 'Mesher Order', this arrangement allows one partner — usually the primary carer — to remain in the family home until the children reach a certain age or another trigger event occurs. The partner who moves out retains a share of the equity but remains liable on the joint mortgage. This is an important point: if your name remains on the mortgage, it will count as a financial commitment when you apply for a new mortgage elsewhere, which can significantly affect your borrowing capacity. This is exactly where speaking to a mortgage broker early makes a real difference.

3.  Buy your partner out (Transfer of Equity)

One partner takes full ownership of the property by buying out the other's share. This requires a 'transfer of equity' — a legal process handled by a solicitor — and usually involves remortgaging to raise the funds needed to pay your ex-partner. You'll need to demonstrate to a lender that you can afford the mortgage solely on your own income. Mortgage Tree can assess your options, search the whole market on your behalf, and identify lenders most likely to accept your application in these circumstances.

Getting Your Property Valued

Before any decisions can be made, you'll need an accurate, independent valuation of the property. A formal valuation survey carried out by a RICS-registered chartered surveyor is recommended over a standard estate agent's estimate — it's based on stricter professional standards and is more likely to be accepted by the courts and by mortgage lenders.

Make sure both parties agree on who carries out the valuation to avoid disputes later. If you can't agree, the courts can appoint an independent surveyor.

How the Selling Process Works

Selling a property after divorce follows broadly the same process as any other sale — but with the added complexity of needing both parties to agree at each stage. Here's a quick overview:

✔  Agree on an estate agent — both parties should agree on who handles the sale. Negotiate on fees; a commission of around 1% is a reasonable target.

✔  Instruct a conveyancer — you'll need a solicitor or licensed conveyancer to handle the legal transfer of ownership. Both parties should ideally use separate legal representation.

✔  Agree on how proceeds are split — this should be set out clearly in your divorce settlement before the sale completes.

✔  Consider your next mortgage early — before the sale completes, speak to a mortgage broker about what you can afford as a single applicant. The sooner you do this, the better placed you'll be.

Transfer of Equity and Remortgaging

If one partner is buying the other out, you'll need to go through a formal transfer of equity process. This has two key elements:

The legal side: A solicitor will handle the transfer of legal ownership from joint names into a single name. This is separate from the mortgage and must be done regardless of whether the property has a mortgage on it.

The mortgage side: Unless you own the property outright, you'll almost certainly need to remortgage — either to release funds to pay your ex-partner their share, or simply to move the mortgage from joint to sole names. Lenders will carry out full affordability checks, so it's important to understand what you're likely to be able to borrow before you commit to an agreement with your ex.

This is where Mortgage Tree can add real value. As independent mortgage brokers, we search the whole of the market — not just one lender — to find the most suitable deal for your circumstances. We understand that divorce applications can be complex, and we know which lenders are more flexible in these situations.

Tax Considerations

Divorce can have tax implications that are easy to overlook in the stress of the moment. Here are the key points to be aware of, though we'd always recommend speaking to a qualified tax adviser or accountant for guidance specific to your situation:

Capital Gains Tax (CGT): Transfers of property between spouses are generally exempt from CGT during the marriage and for a period following separation. However, this exemption doesn't last indefinitely, and if the sale or transfer takes place some time after separation, CGT may become payable. Rules in this area changed in April 2023, so it's worth getting up-to-date advice.

Stamp Duty Land Tax (SDLT): If you're taking over your partner's share of the property through a transfer of equity, you may not have to pay stamp duty on that portion — but this depends on your specific circumstances. Your solicitor can advise on this.

Inheritance Tax (IHT): Transfers between spouses remain exempt from IHT throughout the separation period up until Decree Absolute.

Should You Sell Before the Divorce is Finalised?

This is a question we're often asked, and the honest answer is: it depends. Selling before a financial settlement is agreed can sometimes create complications — for example, disagreements over how the proceeds should be held or distributed. In other cases, both parties may be keen to sell quickly to draw a line under things.

A family law solicitor is best placed to advise on the legal and strategic aspects of timing. From a mortgage perspective, we can help you model different scenarios — for example, what you could afford to buy if you sold now versus waiting — so you can make an informed decision.

🏡  Talk to Mortgage Tree — We're Here to Help

Divorce is complicated enough without worrying about your mortgage. Whether you're looking to remortgage, buy your partner out, or simply understand your options as a single applicant, Mortgage Tree is here to help.

As independent mortgage brokers, we search the whole market to find the right deal for your circumstances — including applications that involve separation, transfer of equity, or recent changes in income.

Get in touch with Mortgage Tree today for a free, no-obligation conversation with one of our advisers.

This article is intended for general information purposes only and does not constitute legal, financial, or tax advice. Mortgage Tree is an independent mortgage broker authorised and regulated by the Financial Conduct Authority. Your home may be repossessed if you do not keep up repayments on your mortgage. For legal advice relating to divorce proceedings, please consult a qualified family law solicitor.