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Credit crunch could lead to a drop in divorce
28 July 2008
Divorce rates could slow down because people can no longer sell their homes due to the credit crunch, according to an independent financial advisory firm.
According to the Office of National Statistics (ONS), the divorce rate is now at its lowest level since 1984 which is due to the current state of the housing market, claims the managing director of Consilium Financial Planning Limited.
Fewer people are willing to end their marriage as they will not be able to sell their property, often the equity in the relationship, which will give either person financial independence, according to Kevin Morgan.
Mr Morgan said: "The 'equity' in the relationship is property and if it can't be sold, it's substantially more difficult to release funds."
Prior to the credit crunch people who divorced were able to remortgage their homes but this is no longer possible because of the shrinking of the mortgage market, argues Mr Morgan.
According to the ONS, the divorce rate in England and Wales fell for a second consecutive year.
