Rent back due to divorce. Choosing to rent back because you're
going your separate ways
sounds convenient in theory. But will it be as beneficial as you think? It
can be a quick solution for solving your accommodation needs but is it
affordable and will it be in your best interests? Even if one or
both parties feel strongly about staying in the house, it may not be as
financially attractive as you think. There's no guarantee everyone's a
winner. We're certainly not trying to put you off! Just that you
need take quite a bit into consideration.
Let us explain.
No one can deny that renting back due
to divorce is convenient. The attractions of a rent back can be as much emotional as practical particularly if you
are divorcing on good terms or there are children involved. Solicitors can also be supportive when
couples and families take the rent back option to solve their
accommodation needs. But how do you assess the "cost" against these more
A rent back due divorce can initially
sound attractive. On the plus side any decent rent back
provider will ensure you have no outlays - no cash costs. So if cash is tight until everything is finalised this has
to be a plus. By the time you shell out for agents fees and additional
advertising costs - you can be talking about thousands of pounds, although fees can usually be paid out of the sale proceeds.
But these costs shouldn't really be driving your decision.
If you're counting the days until
everything is done and dusted opting to rent back due to divorce can give
you more surety on which to be base your plans and it can be a very
quick process - much faster than trying to sell on the open market.
Waiting for a buyer to
show up on the open market may take months. And even when they do there is
still no end to the worry. Will your buyer get the finance they
need? Or try to lower their offer after the survey? And if they're not
chain-free what are the chances their buyer will pull-out.
See what we mean?
These factors may play a role in your
decision to rent back due to divorce. But it's not the full picture.
What about the money side of things? A
rent back due to divorce isn't just about minimising disruption - it's
also about money. Your money. So let's consider your income, the likely
price and availability of rented accommodation in your area and current
Income and rent
First income. If you use the rent back
divorce option how will the rent be paid? Is the person remaining in the
property working? On housing benefit?
Stop right there.
If you have been in receipt of benefits, or hope to be
in the future it's imperative you seek advice to determine the
likelihood that your changed circumstances won't put future benefit
entitlement in doubt. Although policy varies between individual councils..you are more likely to find you're not entitled to housing
benefit if you've sold your house at less than it's full value. There
are exceptions but broadly that's the picture even if you're currently in receipt
of contributions to your mortgage payments.
Other property for rent
Take a look at what's available for
rent in your area. If there are comparable properties for rent at less
than your current outgoings, it's worth thinking about whether simply
renting on the open market will suffice. This can be a more
sensible solution if you're only thinking of renting back short term
Likewise if you get
further down the line with exploring the rent back for divorce option.
You may find the proposed rent for your own home is greater than available elsewhere! This
may have more to do with interest rates than profiteering by the
provider. But the comparison can be very telling.
A rent back due to divorce also needs
to take account of your debts. Do you have debts to pay off? High
levels of secure debt limit your options for selling. And anyway,
if considering a rent back for divorce surely you want as much debt
settled as possible? Credit cards are different. Balances on these are
not secured on your house. However smarter rent back providers will take these
into consideration because they'll influence your ability to pay rent in
the future. Ideally a rent back due to divorce should wipe the slate
clean for you.
Look at this way. Having to service high monthly
minimum payments on your credit cards can make you feel as though your
treading water. Hardly the fresh start you thought a rent back for
divorce might give you.
On the other hand if one party's been
left in the lurch to pay mortgages or debts renting back quickly for
divorce can prevent arrears building up.
Sensible solutions DO exist
Clearly any long term rent back option
has to be affordable..both today and tomorrow and the next day.
Affordable in terms of what you can afford to pay and what you could
reasonably be charged for comparable properties. You shouldn't have to
pay a premium for the luxury of remaining in your home!
Renting back due to
divorce-related reasons can make your money go further. But you do need
to consider the broader picture to decide whether you'll come out a
For an initial discussion on how we may be able to help with your plans
0669 or simply complete the
short enquiry form below.