Divorce, mortgages and new beginnings: Why capacity reports matter at the start of the year

January is widely recognised as a peak period for divorce and separation enquiries in the UK. For solicitors and mediators, this often means a surge in cases involving the family home, mortgage liabilities, and affordability concerns. For clients, it marks a time of emotional upheaval combined with financial uncertainty.

At the centre of many divorce settlements sits one key question: what happens to the property?

This is where a mortgage capacity report becomes an essential tool, for legal professionals and clients alike.

What is a mortgage capacity report?

A mortgage capacity report provides a clear assessment of how much an individual can realistically borrow in their sole name, based on:

• Income and employment status
• Financial commitments and credit profile
• Current mortgage affordability criteria

Crucially, it is not a mortgage application. It is a factual, independent snapshot of borrowing potential, designed to inform decision-making during divorce or separation.

Why capacity reports are so important in divorce cases

During divorce proceedings, assumptions are often made about affordability, particularly where one party hopes to retain the family home through a transfer of equity.

Common issues include:

• One party believing they can take over the mortgage without evidence
• Settlements being proposed that are not mortgage-viable
• Delays caused by unrealistic expectations

A mortgage capacity report provides early clarity on whether:

• A party can afford to refinance the existing mortgage alone
• Retaining the property is sustainable long-term
• A sale is unavoidable based on real lending criteria

For solicitors and mediators, this means negotiations are grounded in reality, reducing conflict, delays, and the risk of agreements later unravelling.

Supporting fair and workable financial settlements

From a family law perspective, capacity reports can support more balanced outcomes by evidencing:

• Borrowing limits under current lender criteria
• The feasibility of proposed housing arrangements
• The affordability of spousal or child maintenance alongside mortgage commitments

This information is particularly valuable when advising clients on consent orders, financial disclosure, and settlement proposals. It helps ensure agreements are not only fair in principle, but workable in practice.

Why the start of the year matters

The New Year is a natural reset point. Mortgage criteria, interest rates, and affordability models change frequently, meaning assumptions based on past borrowing power are often outdated.

For clients going through divorce, obtaining a capacity report early in the year allows them to:

• Plan realistically for the months ahead
• Understand whether staying in the family home is achievable
• Explore alternative options such as downsizing or purchasing independently

For legal professionals, it enables cases to progress more efficiently from the outset.

Beyond mortgages: Highlighting financial vulnerability

Divorce often exposes financial fragility, particularly where one household becomes two. 

Capacity reports frequently highlight:

• Heavy reliance on a single income
• Reduced affordability margins
• Increased financial risk if income is disrupted

This naturally leads into wider conversations around financial resilience and protection, ensuring clients are better prepared for their new circumstances.

Handled correctly, this advice complements legal guidance rather than complicating it.

A collaborative approach between advisers and legal professionals

Mortgage advisers play a valuable role in the wider divorce support network. By working alongside solicitors and mediators, advisers can provide clear, impartial financial insight without applying pressure to proceed with a mortgage. For clients, this joined-up approach reduces stress. For professionals, it supports better outcomes and smoother case progression.

Turning uncertainty into a new beginning

Divorce is one of the most challenging life events a person can face, but with the right professional support, it can also mark the beginning of a more stable financial future.

Mortgage capacity reports provide clarity at a time when clarity is most needed. At the start of the year, they offer a practical foundation for informed decisions, realistic settlements, and genuine new beginnings.

For solicitors, mediators, and clients alike, they are no longer a “nice to have’’ they are a vital part of modern divorce planning.

For any guidance regarding mortgage capacity reports, please contact me -
Kay Kowalewska, 07425648685, kay.kowalewska@dentonsmortgages.co.uk

Any information contained in this article is for general information only and does not constitute personal financial advice. It is essential that you seek independent financial advice from a qualified adviser and professional legal or tax advice before making any decisions regarding equity release, gifting, or inheritance tax planning.