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Depending upon the divorce laws in your jurisdiction she could be entitle to 50% of the proceeds of the property sale no matter if she contributes to the payment or not. In some sense she may be doing you a big favor by contributing half. You may want to seek a lawyer's advice on all this because it is so jurisdiction dependent.

Typically there are closing costs when selling a property. Here in the US, even if you got the asking price, the property would yield about €7-10K. So each party would be entitled to between €3.5-5K. If applicable closing costs need to be factored into the transaction. I am having difficulty finding this information that is UK related for the seller.

Whatever you can do, it behooves you to work with your estranged spouse. Will she take a bit less than what she is owed? Even if it partially depletes your savings, it might be worth it. If she takes you to court to force the sale, those costs can wipe out your savings and yield nothing. By buying her out, you at least have a property on the asset sheet, where paying a lawyer is nothing but an expense.

Anecdote: My grandparents gifted me and my girlfriend £30k so that we
could buy our first house together, and I contributed a further £3k
towards the deposit for a better mortgage rate. Over the next two
years, I paid for the bathroom to be re-done at £7.5k, as well as the
windows and doors for £2.5k, so the house went from being worth £210k
to £250k... and then we broke up. She had contributed 50% to all the
mortgage payments, and was entitled to 50% of the house - it cost me a
further £20k to 'buy her out'.

It was a lot of money to scrape together... but I ended up with a
property and she went back to moving around and renting for a couple
of years, so actually wound up a little worse off than myself - even
after a £20k payment.

In the grand scheme of things; 12,500 is a drop in the ocean. Having somewhere to live is better than nothing, and you'll still have a decent amount of savings behind you.

I appreciate you no longer want to be in that particular location, and we can't tell you what to do, but whilst the house isn't selling and your ex-wife is offering you an out... I would take it.

I am answering from the perspective of:

We have recently separated (in November). At the time, we had had the property on the market for a couple of months. We have left the property on the market since and still have yet to have a single viewing.

I would suggest you reach out to the estate agent (I'm assuming you have "conventionally" put it on the market rather than one of those 'sell your own house through our portal' outfits) to find out what the situation is there -- have they had any feedback from potential viewers, why don't they think it is getting any "bites"? Presumably they want to get their commission..?! Is it on 'Rightmove' and things like that. Maybe they are just rubbish.. What are their terms for moving to another agent? Is there anything obviously wrong with the house (e.g. it's in such a state of disrepair that it's "unmortgageable")?

You can sell any property (within reason!) if you are prepared to compromise on price. If you haven't had even a single viewing it sounds like there is something you need to remedy with the listing / the price / the agent before looking at other options.

Personally (I have a fairly high risk-tolerant attitude) I would buy her out (as part of a divorce agreement) on that basis, if I had reasonably stable job prospects (current employer / could find another) in your situation. Make sure you consult a good lawyer to see that the paperwork is done properly with "signing over" the deeds.

Btw: It isn't clear whether she has "officially" asked (via the divorce procedure) or just unofficially, for you to buy her out. It sounds like you are on amicable terms so I would suggest you agree between yourselves and then get it officially recorded as part of the financial arrangements of the divorce. If you can agree it yourselves first rather than everything going through solicitors, both of your legal bills will be much lower! :)

Source: went through something similar myself 18 months ago.

UK property market is in limbo right now; nobody is buying or selling unless they have to due to the uncertainties of brexit. This has been the case for half a year or so, but is getting really bad right now according to estate agents I know. Autumn and winter are also bad times to sell properties anyway.

If you and your wife (and your divorce lawyers) were amenable to waiting for a while, the situation is likely to improve with regard to getting viewings and being able to sell the property. Take it off the market now, and put it back on the market in early Summer. (this assumes that Brexit is resolved by then, of course, but even if not, summer is always better for selling houses)

If you cannot wait, then the you have the option of selling the house by auction. This typically brings in a lower valuation than a normal sale, and the amount you'll get for the house is by no means certain, but it is a way of guaranteeing a sale (though pragmatically, you will likely want to put a reserve price on the auction to avoid selling for less than you can afford).

I purchased a home Florida many years ago for 165,000. I subsequently took a job in New York and had to put the house up for sale. I listed the house for what I paid for it, 165K. after a couple of monhts my CFO asked me if the house has sold. I told him no because people were not offering what the house was worth. He corrected me by saying "The house is worth what the market is willing to pay"

This is a tough lesson but a true one. Regardless of the marital situation, your asset is worth what the market will pay. I recommend you list the home at a price that will sell, take your loss and then go live where you want to live. Holding on to an asset you do not want to own simply makes no logical sense.

I suggest move on and be happy. 10 years from now you will not miss a few thousand euros.

Buy her out as part of the property settlement and only as part of the property settlement.

Don't, whatever you do, is buy her out without a property settlement. Nobody cares who's name is on the property when it comes to settlement so you'd be just funding her legal fight against you at the cost of being able to defend yourself and she'll still take half the house.

Even though she isn't living there, she still has to pay half the mortgage as it's her name on the loan. Everything she has to spend now is less she can spend on lawyers.

Whilst you're in a position of power (more or less), negotiate like hell and try your best to settle out of court. Do everything you can to avoid court because lawyers will take the lot.

My ex never gave me any choice and used the court system to hurt me. I spent four years fighting and the only winners were the lawyers.

I can't speak for any of the legal matters, such as what she's entitled to due to divorce, what kind of legal agreement you need, etc, but there's something else you might want to consider: if she wants you to buy her out, she's asking you to assume all the risk afterwards. Even if you're on good terms, it makes no sense for her to get 50% of any profit by sandbagging you with a property that obviously won't rent or won't sell and that could sink much lower. If she can't or isn't willing to stick around and ride out the risk, she shouldn't be entitled to an equal payout, even at its current value. I understand that you don't want to be mean about it and that you still care about her, but if she really wants what's best for you, she can't take half the equity and then leave you with a risk like that. Try to negotiate buying her out for less than 50%.