How to Buy Someone Out of a House

Buying someone out of a house is a common process in the UK, especially when relationships change or property ownership needs to be restructured. Whether you are separating from a partner, ending a joint investment or taking full ownership of a shared home, buying someone out involves a financial agreement, legal steps and potentially a new mortgage. It can be complex, but with the right guidance it can be managed smoothly.

This article explains how the buyout process works, who it applies to, what legal and financial steps are involved and what you need to consider before proceeding.

What does it mean to buy someone out?

Buying someone out of a house means one co-owner pays the other to take full ownership of the property. This usually happens when the property is jointly owned and one party wants to keep it, often in situations such as divorce, separation, business dissolution or inheritance arrangements.

The outgoing party receives an agreed sum based on their share of the equity, and their name is removed from the property title. The remaining owner either pays this sum in cash or remortgages the property to raise the funds. Once complete, the buying party becomes the sole legal owner.

Who is involved in the process?

Buying someone out typically involves both parties, a solicitor or conveyancer, and in many cases a mortgage lender. A property valuation will be needed to establish the current market value and calculate how much equity each party holds. If the property has a mortgage, the lender will also need to approve the new arrangement and assess whether the remaining party can afford the loan on their own.

How do you calculate the buyout amount?

The starting point is the current market value of the property. This should be confirmed by a professional valuation or local estate agent. Next, you subtract any outstanding mortgage from the property value to calculate the total equity. If the property is owned 50/50, that equity is usually split equally, although ownership shares can differ if agreed in writing.

For example, if a house is worth £300,000 and the outstanding mortgage is £100,000, the equity is £200,000. If the ownership is 50/50, each party is entitled to £100,000. The person staying in the property would therefore need to pay £100,000 to buy out the other’s share, either from savings or by remortgaging.

What legal steps are involved?

A solicitor or conveyancer will handle the legal transfer of ownership. This includes updating the property title with the Land Registry and ensuring that the departing party is removed from the mortgage and any legal obligations. If the property is subject to a court order, such as in divorce proceedings, the solicitor will ensure the transaction complies with any terms set by the court.

A formal settlement agreement or declaration of trust may also be used to record the new ownership structure and protect both parties.

Do you need a new mortgage?

In most cases, yes. If the property has a mortgage in joint names, the person buying out the other will need to either remortgage the property in their sole name or take out a new mortgage to raise the required funds. The lender will assess the buyer’s income, outgoings and credit history to ensure they can afford the mortgage on their own.

If the lender refuses the application, the buyout may not be possible, and the property may need to be sold instead. It is important to seek advice from a mortgage adviser early in the process to understand your borrowing options.

Are there any taxes or fees to pay?

You may need to pay Stamp Duty Land Tax (SDLT) on the transaction, depending on the value of the share being transferred and whether there is an outstanding mortgage. In some cases, especially during separation or divorce, certain exemptions may apply. Your solicitor will advise on whether SDLT is due and how much it will be.

There will also be legal fees for handling the transfer, mortgage arrangement fees and potentially a valuation cost if required by the lender.

Can you do it without a mortgage?

If you have enough savings or access to funds from elsewhere, you can buy out the other person’s share without taking on a new mortgage. This is often the simplest and fastest option, as it avoids lender involvement. However, the legal transfer of ownership must still be handled properly through a solicitor, and any tax implications still apply.

What if there is disagreement over the buyout?

If both parties cannot agree on the valuation or how much is owed, the process can become more difficult. You may need to involve independent valuers, financial advisers or even a mediator to reach an agreement. In some cases, particularly during divorce, the courts may need to intervene to determine a fair split of assets.

It is always best to try to reach an amicable agreement wherever possible, supported by professional advice, to avoid unnecessary delays or costs.

Conclusion

Buying someone out of a house in the UK is a well-established process that allows one party to take full ownership by paying the other their share of equity. It involves valuations, legal steps, and often remortgaging, and should always be guided by a solicitor. With careful planning, clear communication and sound financial advice, the process can help both parties move forward with confidence.