Is Cash a Better Prospect Than Property If......

JayBrun

Last week Mervin King painted the possibility of a very gloomy state for the economy unless the politicians and presumably others get their act together - and perhaps we all get lucky.

A possible scenario - say the worst comes about and a major Bank or Banks collapse with the FSCS unable to meet the compensation demands and the government either washing their hands of the compensation issue or simply printing lots of money to foot the bill.

For someone in the fortunate position of having substantial savings, at the moment earning very little on deposit, what could be the best course of action to take assuming, optimistically perhaps, there is some hint/warning that everything is about to collapse around us.

Cash seems to be the main casualty of inflation so assuming that rampant inflation would drastically hit the ongoing value of any compensation, and/or 'some' of the savings disappearing due to limited compensation, would property be a better option than sitting on the cash.

What would be the likely/possible consequences in terms of the UK property market and values.
I assume property prices would drop significantly, but presumably cash could drop even more whereas at least with property it would retain some value.

Due to age considerations I'm looking ahead no more than 15, or with luck 20 years, so a housing boom sometime in the distant future doesn't figure in my thinking.

Edit: I own a property which requires significant renovation so one approach would be to buy a second property, with cash, to live in whilst doing up the existing one. Whilst property therefore has a strong appeal, if it is likely be a poor alternative to cash I would give up on the idea.

Joe_Bloggs

Get a caravan and a few stacked porta-cabins. Live on site. I have seen developers camp out in London streets for years.
J_B.

Cleaver

JayBrun wrote: »

For someone in the fortunate position of having substantial savings, at the moment earning very little on deposit, what could be the best course of action to take assuming, optimistically perhaps, there is some hint/warning that everything is about to collapse around us.

Doing nothing and not worry about it. If everything collapses around us then we're all pretty much f*cked, no matter what asset you're holding.

JayBrun wrote: »

Due to age considerations I'm looking ahead no more than 15, or with luck 20 years, so a housing boom sometime in the distant future doesn't figure in my thinking.

I agree. It would therefore seem sensible that you dont invest in property. Obviously the question about buying a house to live in could result in a different suggestion.

HAMISH_MCTAVISH

JayBrun wrote: »

say the worst comes about and a major Bank or Banks collapse with the FSCS unable to meet the compensation demands and the government either washing their hands of the compensation issue

Not going to happen.

or simply printing lots of money to foot the bill.

Unlikely to be needed.

what could be the best course of action to take .

Who knows?

You may as well ask what would be the best course of action to take if the UK was invaded by Zombies.

Cleaver

HAMISH_MCTAVISH wrote: »

You may as well ask what would be the best course of action to take if the UK was invaded by Zombies.

I'd throw my collection of silver bars at them.

Joe_Bloggs

Throwing Silver bars at Zombies is not a money saving tip. There have been suggestions that contingency planning for Zombies is quite advanced in likely areas.
J_B.

Cleaver

Joe_Bloggs wrote: »

Throwing Silver bars at Zombies is not a money saving tip.

It is if you buy in the dips. Which is obviously what I do.

Blacklight

HAMISH_MCTAVISH wrote: »

You may as well ask what would be the best course of action to take if the UK was invaded by Zombies.

I disagree. I think people take that subject very seriously.

Head for Arctic tundra, hopefully they will freeze before they reach you.

http://www.zombiesurvivalwiki.com

ruggedtoast

You wont wake up one day and find you have less house than the day before. You'll never get less than what you initially paid for in that sense.

If I were in the fortunate position of having money I didnt know what to do with, but couldnt afford to lose, I'd probably diversify it over a portfolio of lowish risk investments including a cheapish easily let property.

Sterling has already depreciated substantially due to government attempt to counteract the recession, so its probably safe to assume that will continue at least until we hit an eventual upturn. Savers are being hung out to dry at the moment.

atush

My OH is a kinda old man type. didn't know about Zombie appocalypse stuff lol.

for that disaster, you need secure shelter, food, water and GUNS and AMMO lol.

michaels

I thought a cricket bat and knowledge of the route to the local pub via back gardens was de rigour?

BTW you do realise all those Zombie movies are actually metaphors for how the banks are effectively broke but still alive and shambling along preventing the rest of us from getting on with life as normal...

atush wrote: »

My OH is a kinda old man type. didn't know about Zombie appocalypse stuff lol.

for that disaster, you need secure shelter, food, water and GUNS and AMMO lol.