6 Factors That Affect Home Valuations in Divorce

Deciding what happens to the family home is the most emotionally involved and financially challenging part of any divorce. The family home is a scrapbook of memories and a symbol of the life you built together. But when you step into the legal process, the focus has to shift to the practical side of things.

A matrimonial valuation is the formal process of putting a price on your property in the context of a divorce. This number is the foundation for almost all financial negotiations. It influences everything, including how assets are divided and where each party will live in the future. But how is this all-important number arrived at? It’s rarely as simple as checking Zoopla.

Here are six key factors that can affect the valuation of your home during a divorce.

1. The method of valuation

There are three common ways to value a property during a divorce, each with its own level of formality and reliability. 

Mutual agreement

You and your ex-partner could agree on the value of the property. This is the quickest and lowest-cost option, but it only works if you are on good terms and both have a realistic grasp of the local property market.  

Estate agent appraisals

A more common approach is to ask several local estate agents to give a market appraisal. While this can give you a good indication of the property’s value, it is an educated guess and not a formal valuation. An estate agent’s main goal is to win your business, which can sometimes lead to a more optimistic, inflated figure. 

RICS chartered surveyor valuation

For a valuation that will stand up in court, a RICS (Royal Institution of Chartered Surveyors) registered valuer. This is the “gold standard” and often a requirement if you can’t agree. 

This is often a requirement in contested divorces and provides an impartial, evidence-based assessment of the property’s market value. 

A RICS valuation is prepared in accordance with strict professional standards and is the “gold standard” for court proceedings. As part of a fair division of your finances, an accurate valuation is essential.

2. The date of valuation

The property market is always on the move, so timing is everything. A valuation is a snapshot on a specific day. In a volatile market, a delay of even a month could see your home’s value swing up or down significantly.

Because of this, the court will always want to see a recent valuation to ensure a fair settlement. If there is a long gap between the initial valuation and the final hearing, you will likely be asked to get an updated one.

3. Market conditions

Interest rate changes, shifts in supply and demand, and even the time of year can all influence how much a property is worth. Data from the Office for National Statistics (ONS) House Price Index is a great resource for seeing how values are trending across the UK. 

A professional valuer will analyse this type of data and look at “comparables”, i.e. recently sold properties of a similar size and condition in your neighbourhood, to gauge the current market value of your home. If the market is slow, with a few recent sales, it can be more challenging to arrive at a precise figure.

4. What a valuer sees vs what you see

When a valuer walks through your front door, they don’t see the place you brought your children home to or the wall where you marked their heights. They are trained to see a property’s market potential – its assets and its liabilities. 

That stunning loft conversion you poured your savings into? That will almost certainly add value. The landscaped garden that has been your pride and joy is also a definite plus, and they will also spot things you might overlook. Those could be dated wiring or windows that need replacing. 

Even if one of you paid for a major improvement like a new kitchen, the increase in value is typically considered a marital asset to be shared. This principle becomes even more critical when untangling multiple properties, which is a common feature in our clients’ divorces.

5. The difference between value and equity

An estate agent might tell you your house is worth £500,000, but that isn’t the number that really matters in your divorce. The key figure is equity.

You can think of it as cash you would be left with if you sold the house today, and immediately paid off the mortgage and any other loans tied to the property. This is the actual pot of money that forms the basis of your financial settlement. That is why having an up-to-date mortgage statement is necessary for getting a true picture of what is available to be divided.

6. Remember the taxman

Just when you think you have it all calculated, there is Capital Gains Tax (CGT) to consider. While you don’t usually pay this tax on your main family home, things can get complicated when one person moves out. For a time, the person who left could have faced a potential tax bill on their share if the property’s value increased after they moved. 

Thankfully, the government recognised how this could be seen as unfair. A recent rule change gives separating couples a much wider, three-year window to transfer assets between them without triggering a surprise CGT bill. It is a welcome bit of breathing space during what is already a stressful time. 

At Maguire Family Law, we know that untangling the future of your family home is tied up with your sense of stability, security, and your family’s history. 

But by gaining a firm grasp on these potential factors, you take back a degree of control. Understanding how your property divorce works is the first step towards building a fair settlement that allows you to confidently lay the foundation for your next chapter.