Separation: Feel trapped by house prices

[FeelSoStuck]

I go round and round in my head trying to work out how I can leave DP.

Our house would probably sell for £600k, but that is not enough to buy two smaller places which would both have room for our DC to live on or stay in. We are in our early 50s, not much time to take out another mortgage, which would need to be big. To buy DP out of our house I would need to take out a mortgage of about 250k. I can't afford repayments on that, my salary is a about £40k, his is about the same.

I would need to move a good ay further out to afford somewhere with what I would have left from my share of the house. I couldn't even afford rent levels in this area, I don't think! We are in a non-posh area of London, but the rise in house prices and rents has been ridiculous.

I can reconcile myself to splitting up, but not to dragging DC away from a brilliant school, close friendship groups etc, all in the wake of a family break up.

My area of work is in London.

What can I do? I have a personal pension plan which has about £120k in it. Would I be allowed to liquidate this? I have no other pension, no professional / job related pension.

There is no violence or anything like that, I am just disenchanted and miserable.

How old are your dc?

The only solution I came up with for myself was that I would move out and rent in shared house.

Your dc sound older than mine so that is perhaps a short term solution?

How old are the DC? Does you husband feel the same way?

Don't liquidate your pension, you would likely be stung for a big tax bill and would lose a huge chunk straight away.

What is your current mortgage?

DC: 12.

I don't think he wants to stay in the relationship out of love for me, maybe some 'family' sense, and staying together for stability.

I hadn't thought of the tax implications of using my pension. Hmmm.

We have recently paid off our mortgage, and ought to feel rich and liberated.

We did have half a conversation about splitting up and don't think he would be unco-operative in a way that would impact badly on DC. He half suggested I could stay in the house until DC leave home - maybe we could find some solution that we both jointly buy another property for him? Or I pay him rent for the half of this house that is mine?

Maybe I should go and see a financial advisor.

Oh lord, what an awful dilemma. I sympathise; we too would be in a similar situation (not that we're planning to split up, but hypothetically).

You could do what my Russian colleague calls a Soviet divorce; apparently in the Soviet Union splitting up was impossible for most people, so the couple would agree between themselves to live separate lives to all intents and purposes, still sharing the same house but as housemates rather than partners.

If it's reasonably amicable, is this worth thinking about and talking through togethet?

I think renting somewhere and you paying half is a workable solution and in time you can sell the property.

PiratePanda- that's interesting, I have just started a thread in Relationships asking if anyone has experience of attempting what you call the 'Soviet Divorce'.

Or I would be prepared to pay half towards his rent elsewhere.

If your DH would be willing to do that then I think agreeing to rent him somewhere would work.

I'm not sure how anyone could be amicable once other partners became involved if you still lived in the same house? But that may just be me.

My H was fine with the house sharing idea until I mentioned I didn't want him asking questions who I was out with etc. because if he ever started going out again etc I didn't want to know the detail.

I think he expects me to live like a nun and not move on whereas to me that is the point of ending the marriage so that we each are able to move on and perhaps meet someone else one day!

I think amicable-ness in the face of a new relationship could be something that happened after a real firebreak, once other partners were involved.

Looks like an amicable. mutually helpful renting model might be one to look at.

I saw your other thread. I know a lot of people these days couldn't possibly imagine it, but surely this was the norm in the days - not so long ago - when divorce was much harder to get than it is these days and socially stigmatised?

Come to think of it, I know no fewer than three people from Northern Ireland aged in their early 30s - late 40s whose parents separated but never divorced and never separated their financial affairs or the marital home, and still basically looked after each other practically, but emotionally disengaged.

With house prices the way they are now, unless there's abuse or adultery surely we have to start rethinking how to do the best by our children?

If you are early 50's you would have 15(ish) years until retirement wouldn't you? How much would a 2 bed house be in your area, if you were to sell the house and have £300k equity then I can't imagine you would need a huge mortgage on top of that?

They live in London Rockchick, where the average house price is just shy of £450K and anywhere near a decent school is going to be more.

FWIW I don't live in London, but within 1 hr's commute (just). Two bed terraces in good but not the best parts of town are currently changing hands for £450K plus, cadh. The housing market is insane and getting worse - the OPs dilemma is a very real one.

That should be cash not cadh...

Could you not get a one bed and sleep in the lounge on a nice sofa bed.

Thank you for your understanding, PiratePanda. I do wonder whether this ridiculous housing situation will precipitate new approaches.

I was in this situation 3yrs ago. Told H I wanted him to leave. Though upset he found a little cottage to buy in the same town and moved in six months later. Living separate lives in the marital home was awful. Don't do it !
We owned the house but had a small endowment mortgage on it and were in our mid 50s with two teens at school. I took over paying mortgage but house was still in joint names. We decided not to go to the courts to work out finances. I wanted the house with its sizable equity and he used the endowments to pay for his place. He will keep his pension. It all works out pretty much the same. I earn half his salary but just wanted a clean break. He pays me a generous amount for the DCs. I then had to find a mortgage and because of my age (57)and low income it was difficult but eventually got an interest only one to cover old small mortgage for 12 years on the basis that I would sell and downsize to pay it off. The house deeds are now in my name only so belongs to me. Yet to divorce but have seen solicitors and have sorted out a consent order for finances that we will put to the courts when we do divorce. It's all very amicable, thankfully.
I will keep my pension too.
Is this way round things a possibility for you?

How much equity do you have?
Could you get a one bed flat and a sofa bed or a two bed flat rather than a house?
Could you give your husband an amount that you can afford to repay on a mortgage (3 times your salary) and defer the rest until your child is 18?

You will not be able to cash in your pension early as there are quite strict rules about withdrawing funds from mortgages and even the new rules limit how much can be withdrawn at any one time.

I live in London and I know the house prices are crazy here, but it's not impossible to buy a 1-2 bed flat for £300k. It probably won't be as nice as a £600k house, and the location might not be as good, but that's what most people have to deal with in a divorce. At 12 your ds will be able to travel from almost anywhere on the tubes, so you could consider places all over London, and a teenager will be fine in a flat rather than a house.

I think you can take 25% of your pension tax free once you're 55, so if you can stay in the same house until you reach that age, you could wait until then, and that might give you a bit more to be able to move. But who knows what will happen to London prices in that time? I would also worry about renting long term as rents tend to be higher than mortgage payments here, and it won't be good to have to keep paying rent once you're both retired.

I think living together in the same property would be problematic if one of you started a new relationship (which I'm sure would happen eventually).

You have £120k in a pension and are in your 50s. At 55 you can take 25% of that as a lump sum = £30,000. You can take the rest subject to 55% tax (or down to 40% when the budget changes come in (and perhaps some taxed at 20%) but that is a lot to lose to tax so you might instead want to take the £30k at age 55 and buy an annuity (they are not always as bad as people say with the balance which will probably pay you £5k a year or so before tax. That would probably be added to your income for a lender to assess if you can borrow £220k - the sum youi need to borrow less the £30k to buy your husband out of the house. If you are no where near 55 yet this plan does not work as you have to be 55 to take the pension and lump sum.

So then you are looking at current income plus £5k and seeing is that enough to let me borrow £220k. You might be able to rent out a couple of rooms in your house to bring in more income too to help. I think it is probably doable. My father worked full time to 77. You might have 20 more years of work ahead. Compulsory retirement of you by an employer is now illegal. We divorced. I bought out my ex and the children stayed with me. They need a house even at university stage too as half the year is holidays and they are perhaps home more than even when they are at school at that stage, never mind after university. It would be quite unfair not to buy out your husband as he will want the £250k too to buy somewhere else. Consider if you can get an interest only loan too or equity release schemes.
Another possibility is one of oyou could buy a buy to let as they include the rental income as your income plus your salary in assessing if you can buy. Also your ex could also do the same on his pension as my suggestion go you, at age 55 too so you both are releasing 25% as a cash lump sum at age 55 and using that to keep the future borrowings you both have low (of course this will cut to pieces pnesion planning but may be a price worth paying).

I see the problem, and I think the best solution is the one suggesting you go for a 1 bed, or the cheapest 2 bed you can find. If needs be, you could have a sofa bed for when you have the children with you. If you made the sitting room really lovely and invested in a proper comfy sprung sofa bed that could work quite well.

If you had small children it would be a different story but at this age it's not too many years before they will be off to Uni or whatever. And as the other poster said, they are of an age to get around independently on the tube so they don't actually need to live so close to school. The key thing is they are already IN a good school, they won't lose their places so you don't have to pay the premium price of someone desperate to get into the catchment area.

If you can make the 'soviet divorce ' idea work, that would be ideal but I suspect it's pretty rare that couples manage that.

Your new home won't be as salubrious, I think you just need to accept that. On the other hand, you and your DH will each have assets which are purely your own once you've split. Look at it this way: you could afford the nice 600k house purely on the basis of buying it jointly. It wasnt anything you'd ever have been able to buy purely under your own steam (nor would he under his) ... If you change your mindset about it, it may help you to feel less despondent

If you can keep the house though the children will be so grateful. Divorce is bad enough but even worse if you are moved miles from school into some tiny flat. A normal teenager would probably hate the parents who forced that on them just because the parents couldn't tolerate each other until the teenager left for university.