How are savings for a house affected in a financial crash?

westernpromise

padington wrote: »

You might not have 250k in a crash. Your bank might have gone bankrupt. The cashpoints might be closed. A new tax on savings might get introduced to pay for the national debt.

Anything could happen. Waiting for a crash is like waiting for a national accident, you have no idea what state the state will be in and how that will effect you.

Risky game. Sometimes it's better to make hay whilst he sun shines and put down what you can, when you can to pay for the roof over your head.

Exactly.

Before the 1989 crash I paid £85k for a London flat with a £72k mortgage (85%) and I held back £6k in cash as a buffer.

Within 2 years it had fallen in value to £59k and my £6k buffer had been swallowed by doubled mortgage payments.

At this point it availed me not at all that a 1-bedroom flat in Mayfair was available at £100k. If I'd sold I'd have been £15k in debt so I couldn't sell.

If you were lucky and had been born 10 years before or 3 years after me you were laughing, but nobody else was.

In 1988 I could have afforded the Mayfair flat at £150k more easily than I could at £100k 2 years later.