Legal Information Centre

02 May 2008 by Mary Heaney

Family solicitors predict that house prices will impact on divorce

Divorce solicitors are looking at the impact of the property crash for those thinking of divorce, reports Maureen Mullally.
We can’t bury our heads in the sand any longer.  All the experts agree that property prices have dropped; most are predicting that values are likely to decrease even more.  Divorce solicitors are considering how this will affect the numbers of couples embarking on divorce proceedings.

In many cases where a financial apportionment is necessary the likely price to be achieved on sale of the matrimonial home represents the principal asset of the husband and wife concerned.   Most couples will be paying off a mortgage on their homes.

The starting point in financial negotiations will be for husband and wife to reach agreement on a valuation of the property.   If, as frequently happens, they cannot agree on that, they or their divorce solicitor  will get three valuations from different estate agents; agreement is usually reached by taking an average of the three figures produced..

The cost of redeeming the mortgage, plus the likely costs of sale, will have to be calculated and deducted from the agreed valuation in order to arrive at a figure which represents the equity - or net value - of the property.

It is never the case that two single people can live as cheaply as a couple living together. Spouses who are sufficiently well off, with a marital home which is worth a substantial amount, may be able to acquire two separate homes after sale of their property.

In many cases, however, finances are too stretched to make this possible.   This sad fact gives rise to the conviction, shared by many ex-husbands, that family courts give preferential treatment to wives.

The law imposes an obligation on family courts to make decisions which give priority to the interests of any children of the family of divorcing parents. Because the mother is usually the main carer for the children, this means that family judges are often forced by circumstances to make orders which enable a wife to remain in the matrimonial home with the children.  

If the financial situation is such that he has no money to buy a new home for himself,  her husband may have to wait for any share in the property to which he may be entitled until the youngest child in the family completes his or her education.

The likely effects of a drop in property values will have an inpact in the following ways: FIrstly, divorcing couples are going to find it more difficult to agree valuations for the purposes of financial negotiations. Additionally, those who have agreed to sell could encounter problems achieving a sale once their properties have been put on the market.  

Consequent delays in the separation process will put more strain on couples forced to continue living under the same roof.

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