How to raise funds to buy husband's portion of the family home

Kim1963

My sister is currently divorcing from her husband of 25 years. She works as an events designer and runs her business from her home address in Teddington, a job that requires both space to build props and proximity to her work venues, which are generally in London. Running the business from her home address has meant that she can earn a living by keeping her overheads low. Renting a workspace locally would effectively consume any earnings and has not been viable. In addition her son who is currently at university and 20 years old, lives at the home address and is supported by my sister when he is home from university.

My sister's husband is determined that the family home must be sold and split 50/50 and UK divorce law seems to support this position. However, it will be disastrous for my sister.

We are trying to find ways to raise funds either in the form of a loan or mortgage to buy her husband out. We are hoping he might agree to less then 50% but this might be unlikely as the law is so firmly on his side. Is there any way that she can raise the money to secure her home and business, even if it is just for a further 3 years which will see her son through university? The home is valued at £1.3 million. I am hoping that there will be a way we can solve this problem so that her husband can move on with his life and have the money he wants and my sister can stay in her home and work space. In common with most people, the covid year impacted her work reducing it to nothing and she is now working hard to rebuild her business. Things look good work wise but having to sell and move will reduce her work capacity and add to the stress of this whole process.

I would really appreciate any advice.

Caz3121

is the house the only asset? no savings, cars, pensions? any mortgage, other debts?
It would be best to look at the total pot, for example if husband has higher pensions it may be she takes a higher % of the house and he keeps his pension
Has she explored how much she would be able to raise in mortgage?

dimbo61

She may need to sell and buy something more suitable with say a separate garage or outbuildings which could be turned into an office/workshop.
With £650,000 she should find something suitable.
I am guessing that her husband has a good job and maybe a good pension pot.

Kim1963

Thanks for your thoughts. The house is the only asset. Neither have large pensions but husband stands to inherit a sizeable amount of money from his parents. He does have a good job ( established actor). My sister has looked at raising a mortgage and the advice was to achieve a good 3 years of accounts to show her income so she could secure a larger amount on mortgage. The main problem is the husband does not want to wait three years. Their current mortgage is low and they do not have debts. It is actually proving hard to find anything in or near Teddington with a separate garage and outbuildings for £650.000. We are looking! 

badmemory

Has she made him aware that if she has to move to smaller premises he is going to have to house their son?  Said tongue in cheek by the way, but it is surprising how much this cools their enthusiasm.

amnblog

dimbo61 said:

She may need to sell and buy something more suitable with say a separate garage or outbuildings which could be turned into an office/workshop.
With £650,000 she should find something suitable.
I am guessing that her husband has a good job and maybe a good pension pot.

Not in TW11 or surrounds

Kim1963

badmemory said:

Has she made him aware that if she has to move to smaller premises he is going to have to house their son?  Said tongue in cheek by the way, but it is surprising how much this cools their enthusiasm.

Haha! Well, I think he believes the son can fend for himself as he is over 18. Funny how easy it is to drop your responsibilities to your children even when they are still dependent.

Thrugelmir

Be prepared to move further out of London to find an affordable property.  Unfortunately divorce does to tend life upside down. Better to be pragmatic than waste time dreaming. 

london21

Why do you think he will accept less than 50%?

Will your sister accept less than 50%?

I think the husband wants the property sold to get the maximum amount.

That is a large amount to raise she will likely require a mortgage and they will base on her income/affordability.

The age of the child been over 18 would mean difficult to use as a basis because no longer a child.

What about using her 50% £650,000  proceed to buy a property within her budget. Likely get a decent size property mortgage free, depending on location/size etc. Might need to move to a nearby area.

doodling

Hi,

With no current income finding and funding a £650k mortgage is going to be impossible.

As others have said, it is worth looking at the whole of the marital assets to see whether it is possible to come out of the marriage with a bigger proportion of the house at the expense of other things but the near zero recent income is still likely to be an insurmountable obstacle.

The dream solution would be to find a 1 or 2 bed flat with attached garage or a commercial space with a flat above.  I suspect that both are challenging at that price in that location.  It would be worth talking to local estate agents (particularly those who also deal in commercial property) to see if they have anything and can give an indication of the likely cost of such a property.

Otherwise, looking at buying separately 1 (maybe 2) bed flats and suitable garages or commercial spaces might work but again you have a very (maybe impossibly) tight budget.

The only solution may be to move somewhere that isn't one of the most expensive locations to buy property in the country.  There are places where £650k would get you something amazing, but they aren't near London.

gwynlas

Your sister is going to have to lower hher expectations as unless she is in line for  a large inheritance or her business is going to soar the reality is that they will have to sell the family home. She would be ble to afford to buy somewhere like Kingston from her half of the proceeds or she could rent and take on a mortage in  few years time. She could also look to rent commercial premises for her business or simply use a storage facility.