Couples Divorcing - Should they sell or let the house?
The good news is that divorce rates in England and Wales are at their lowest for 26 years as reported by the Guardian in August 08. However, there are still 11.9 divorces to every 1000 married men and women in the UK. The toughest economic question for those 11.9 couples is “Do we sell or rent out the house?”
They say that moving home and divorcing are two of the most stressful things in life. Consequently, when you combine the two, your emotions and mental well being will be tested to the extreme limits. It is important to try to think of the property as a business transaction or investment. Try to think as clearly as you can before you both make a decision that you may regret. Weigh up the pros and the cons of each decision and take it from there.
Marilyn Stowe, of Stowe Family Law has suggested that the recent economic crisis may have had an effect on divorce rates as “people just can’t afford to get divorced at the minute”.
For those unfortunate couples that are able afford a divorce, they still have to answer the million dollar question “Should we sell the house or rent it out?” This might sound extremely cynical however, if you speak to any estate agent, they will tell you that separations and divorces appear to pick up after the festive season as couples decide to sell their family investment. As pointed out by our beloved high street retailers, the festive season looms. Will you be having this discussion with your partner in the coming months?
As the housing market continues to fall, more and more couples are deciding whether to sell or to rent. Considering your own personal circumstances, selling may appear to be the easiest option – you might be looking for a clean break, a release of equity to start your new life, however, your “pot of gold” that you have both worked for, has most likely been depleted (by as much as £30,000 on the average UK property price according to figures recently released) and to sell your property would be a financial disaster.
So what can you do?
You and your partner may consider renting out the property. Who knows, with Agents reporting a 45 – 50% increase in tenant demand, you may even be able to make your full mortgage payments. However, the decision to rent out your property should not be taken lightly. In most cases, this decision will mean that you and your ex will need to work together for the next 6 – 12 months or for however long the tenants remain in the property.
So you have decided to rent it out – what happens next?
Make sure that this is a decision that you both want to take. As joint owners of the property, you will both need to agree to the tenancy agreement.
Our top 10 tips for new landlords start with your Mortgage Lender (if you have one that is!)
Lastly, if you do not want to be directly involved with your tenants, find an agent that offers a full management service and re-visit the situation in another 6 – 12 months. Hopefully the market will have picked up by then and you can both afford to sell the property and limit any extra financial loss.
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ABOUT THE AUTHOR
Jonathan Daines - jonathan@LettingaProperty.com - is Co - Director of http://www.LettingaProperty.com, a property search portal and information guide dedicated to the letting Industry and advertises Letting Agents and Private Landlords' Properties to Let to thousands of Tenants every day.