More than a third of those who split with a partner they own a home with are forced to stay living together as they can’t afford to leave, research has found.
In a poll conducted by property website Zoopla, 34 per cent said they hadn’t been able to move out when the relationship broke down.
One in eight of those who remained living with their exes said they had to continue sharing a bedroom with them due to a lack of space. To make things even more awkward, 15 per cent of respondents said their ex-partner started a new relationship while still living together.
Living nightmare: More than a third of home-owning couples have told how they have been forced to live together after splitting up
Sharing a house together was not a pleasant time for most – just 9 per cent said they were able to remain diplomatic, while 30 per cent described it as an ‘awkward’, 27 per cent deemed it ‘upsetting’ and 22 per cent remembered it as an ‘excruciating’ experience.
This is Money has looked at what people can do when buying a home to try and protect themselves against this situation.
One in five have an ‘escape fund’
For most people polled, logistics or finances were highlighted as the main reason for staying in the same home as an ex after a split.
Nearly half (47 per cent) said they simply couldn’t afford to move out.
Indeed, 37 per cent revealed that they had no savings at all when they and their partner split up, rising to 46 per cent for women. Meanwhile 17 per cent said they stayed living together for the sake of their children.
In a bid to prevent such scenarios from happening, some respondents said that they had an ‘escape fund’ in place.
Tricky situation: For most people polled, logistics or finances were highlighted as the main reason for staying in the same home as an ex after a split
This is a secret savings account that their partner does not know about, that is specifically there for the event of a break up.
Nearly one in five (18 per cent) said that they had one in place when their relationship ended. On average, the amount of secret savings was £5,586.
Financial experts say these side-savings will be key for many ‘to give them a layer of security and self-sufficiency when coming out of a relationship’.
They also highlight how exiting a mortgage can often take longer than ending a marriage.
Of those polled, it took an average of a year to finally break free of a joint mortgage.
And even once the mortgage did come to an end, 29 per cent had to pay a fee for ending the agreement early – on average a £2,643.
Daniel Copley, consumer expert at Zoopla, said: ‘Buying a home with a partner is a wonderful, exciting experience. But if the worst does happen and you split up, it’s going to be awkward if you’re forced to remain living with them.
‘There’s also no getting away from the fact that breaking up is expensive, from having to shell out for a new place, to penalty charges for ending a mortgage early.
‘But people can take steps to plan ahead. If you can, save up some money that will allow you to leave the home for a while after a break up and cover key, immediate expenses. I’d also strongly encourage homeowners to protect their share in a property through legal avenues such as a deed of trust.
‘This allows those who jointly purchased a home to protect their share of the investment – money they can then use to get back on their feet.’
How to protect yourself when buying a home together
This is Money asked experts what couples – as well as friends or family buying together – can do to make the process as easy as possible should they no longer want to live together in future.
Be open about your finances
Before you make an offer on a home, have an honest chat about what you can each afford and how the property and mortgage payments will be paid for
One piece of advice offered up by nearly all of the experts we spoke to was to start the home-buying process with a frank conversation about your finances.
‘Before you buy with a partner or group, sit down and talk openly about your respective finances,’ says Sophia Guy-White, co-founder of first-time buyer mortgage lender Generation Home. ‘The reality is that individuals rarely have identical financial situations and contribute equally.’
This can become even more complicated when someone’s parents are contributing to the deposit for the new home, for example.
They should be included in these conversations too, so that everyone is on the same page about where the money is coming from and what they will be expected to contribute to the property purchase, ongoing mortgage payments and upkeep.
Sign a Declaration of Trust
It is important to document any money spent on the home, to avoid arguments over who paid for what in the event the relationship falls apart
If joint property buyers are not contributing equal amounts to the deposit or mortgage payments, it is a good idea to sign a Declaration of Trust. Also known as a Deed of Trust, this is a legal document drawn up by a solicitor. It sets out how any equity would be divided if the property was sold, or remortgaged to remove one party from the deeds, in future.
Marilyn Bell, partner and head of the family law team at SA Law, says: ‘It can provide for a specified sum, or percentage, to be paid first to the larger contributing party before dividing the rest equally.’
In the case of a divorce, the court does have the power to make a different order to what is specified in the Declaration of Trust. However, Bell says it is still ‘well worth doing’ as the document can be used as evidence in such cases.
It can be especially useful if one party’s parents are gifting or lending a couple money towards their deposit, to avoid future disputes about whether their ex-partner needs to pay them back.
Homeowners should make sure the Declaration of Trust is updated if one party starts contributing more or less to the cost of the home, or if significant money is spent on the property – for example building an extension.
Keep track of who pays what
Making payments towards your home from separate bank accounts can help to avoid arguments about who paid for what, in the event that a relationship later breaks down
It may not feel especially romantic, but it is also a good idea for each member of a couple to pay their share of home-related costs from their own bank account, rather than transferring it to the other partner for them to pay in full.
This creates a paper trail which can avoid disputes over who paid for what if the relationship later breaks down.
Says Bell: ‘It is always well worth documenting contributions to purchase, and to the mortgage in a straightforward way.
‘For example, each party can pay the conveyancing solicitor from their own bank account. They don’t have to muddy the waters by transferring it from one to the other before the recipient pays the solicitor.’
You can’t ‘divorce-proof’ your home entirely
While the above are all useful steps to take, many of them rely to an extent on a break-up being relatively amicable.
‘These legal remedies are unlikely to withstand an acrimonious divorce in court, especially if there are children involved,’ says Scott Taylor-Barr, financial adviser at Carl Summers Financial Services.
These legal remedies are unlikely to withstand an acrimonious divorce in court, especially if there are children involved
Scott Taylor-Barr, financial adviser
And whatever steps you take to divide up your property ownership, your mortgage lender will still regard anyone named on the mortgage as having joint liability – meaning that if one partner doesn’t pay, the other will be forced to do so or risk damaging their credit rating.
‘Lenders have for many, many years lent mortgages on a joint and several liability basis – meaning all parties to the mortgage are responsible for 100 per cent of it, not just what they see as their ‘share,’ Taylor-Barr adds.
‘One party cannot be released from their obligations under the mortgage unless the lender agrees to release them. No amount of paperwork between the borrowers can change this.’
