Housing crisis? Stamp duty rush triggers legal warning for unmarried partners

House prices hit a record high in January as buyers rushed to complete deals before the stamp duty threshold dropped to £125,000 on April 1, while mortgage brokers reported buyers pulling out of deals because they could not move before the end of March.

Now Family & Matrimonial Solicitor, Natasha Aspinall at leading law firm Brindley Twist Tafft & James (BTTJ), is urging new homeowners to get a cohabitation agreement in place if they haven’t already.

She said: “The estimated number of transactions of residential properties valued at £40,000 or greater in January was 95,000 – 14.4% higher than the same month in 2024. Understandably, many homeowners overlooked legal guarantees in the scramble to save thousands before the stamp duty rise.

“However, what I have seen time and time again is unmarried partners who live together and then break up simply assume they have a right to the assets they shared.

“Common law spouses as they are generally understood by the public are misconceptions. Living with a partner – no matter how long the relationship might last – does not generate the rights that many people believe.

“The common assumption in cases where you have lived together a long time and have children together is that you have acquired rights against your former partner’s property, pension, and income – but this is not the case.

“It has caught many people out over the years, and we have been approached by people who have found themselves in a difficult situation.”

Natasha advised unmarried couples living under the same roof to seek legal advice in the early days to draw up a cohabitation agreement to save both parties further anger and pain if they break up. It is especially important because modern arrangements and assets are more complicated when, for example, one person buys a property on their own and then a partner moves in later.

“A cohabitation agreement can be really helpful, and not just in case a couple separates,” Natasha adds. “It can outline how they own a property, and how they will contribute to the home, such as jointly-funded renovations or extensions.

“You are very limited in what you can do as a former cohabitee without that legal agreement and with over 3.6 million people cohabiting in the UK it is important that awareness of this is raised.

“It’s not very romantic and nobody likes to think about these things but what we always advise clients who come to us for advice is to deal with it at the outset. Get a formal cohabitation agreement in place to give both parties peace of mind.”