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House price crash: Could the 18-year property cycle predict the next downturn? This is Money Podcast

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Another week, another house price index stating record growth. 

This time it was the turn of Nationwide, which said prices had risen 10.9 per cent in the year to April, reaching a new high of £242,832 – up by £23,930 compared with 12 months earlier.

Most experts say this is down to people’s changing lifestyles during the pandemic and the incentive provided by the Government’s stamp duty holiday. But are there other forces at play?

Fred Harrison, a British author and economic commentator, successfully predicted the previous two property crashes years before they occurred – and his 18-year property cycle theory says that house prices should continue to boom before crashing in 2026. 

His theory is based on analysis of 300 years of data, and suggests that the underlying force behind rising prices in the property market is the finite supply of land.

This, he says, combines with greed and speculation to turbo-charge sentiment and send prices spiralling before a bubble bursts.

Given that early predictions of a house price crash during the pandemic were wildly inaccurate, does his model provide a better idea of what might really happen?

On this week’s podcast, Georgie Frost, Tanya Jefferies and Helen Crane also look at the other factors shaping the housing market, including tantalisingly cheap mortgages with two-year fixed rates as low as 0.99 per cent.

But aside from these headline-grabbing rates, the typical mortgage has actually become slightly more expensive in the last year – so why are experts saying locking in for five years is still a good idea?

One group that isn’t so happy about this year’s house price increases is first-time buyers – especially those who took out Help to Buy loans a few years ago and are now paying back inflated sums into the Government coffers based on their homes’ increased values.

Helen discusses whether they should hold off paying back the loans in the face of spiralling interest – and whether today’s first-time buyers should still consider using Help to Buy at what is widely tipped to be the top of the market.

Do you want an ‘essential’, comfortable or luxurious retirement? New research explains how much you will need to put away to get the lifestyle you want in your later years 

Away from housing, we talk about the latest research telling us how much we need for a decent retirement – depending on whether we want an ‘essential’, comfortable or more luxurious time of it in our older years.

Tanya explains how much people should be putting away, and how that changes if you are single rather than part of a couple.

We also discuss controversial comments made by Paul Johnson from economic and public finance policy unit the IFS, who said most people don’t need to worry too much about saving into their pension until they are in their 50s.

Is it really wise for younger people to push pensions down their list of financial priorities?

Finally, we answer a question from a reader who took £20,000 out of their pension pot to deal with Covid cashflow issues – but is now worried that their tax-free annual allowance has taken a hit.

How to listen to the This is Money podcast 

We publish our podcast every Friday to the player on This is Money, above, and on Apple Podcasts (iTunes) and on the podcast platforms Audioboom and Acast, both of which allow you to listen on desktop, mobile, or download an app. We also now publish to Spotify.

To download the Apple Podcasts app if you do not already have it, go to the App store. Or go to either the Apple App store or the Google Play store on Android to download the Acast, AudioBoom or Spotify app. 

Press play to listen to this week’s full episode on the player above, or listen (and please subscribe and review us if you like the podcast) at Apple Podcasts, Acast, Audioboom and Spotify or visit our This is Money Podcast page.   

THIS IS MONEY PODCAST

This post first appeared on Daily mail

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Women’s employment less affected by pandemic than many feared

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Women’s work and employment have been less affected by the pandemic than many feared, according to the Resolution Foundation. 

Experts had warned of a ‘shecession’ after the hospitality and retail industries – which have a high proportion of female staff – were hammered by lockdowns. 

But the Foundation found women’s working hours fell by a third less than men’s. And while the employment rate among men dropped by 2.4 per cent, it was only 0.8 per cent lower for women. 

Concern: Experts had warned of a ‘shecession’ but women’s working hours fell by a third less than men’s

And full-time female employment has actually increased, partly due to the concentration of women in the public sector. 

But inequalities remain. Hannah Slaughter, at the Resolution Foundation, said: ‘The impact has been much more equal than expected. But with the crisis still with us, the lasting gender impact is still highly uncertain.’

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This post first appeared on Daily mail

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JD Sports bracing for bruising investor rebellion

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JD Sports is bracing for a bruising investor rebellion after it was slammed for handing ‘inappropriate’ special bonuses to chairman Peter Cowgill. 

Glass Lewis, an influential shareholder advisory group, said JD Sports’ backers should vote against its pay policy. 

Cowgill took home £4.3m in bonuses last year – pocketing £5m in total even after he cut his salary by 75 per cent for several months. 

Rebellion: Glass Lewis said JD Sports’ backers should vote against its pay policy

A large chunk of this was from ‘special’ bonuses that were approved in 2019 for ‘exceptional past performance’. Glass Lewis believes the company should have either slashed or scrapped bonus awards. 

The 68-year-old’s bumper pay packet came despite it taking £86m in furlough support and £38m in business rates relief. 

Glass Lewis also recommended investors vote down Cowgill’s re-election to the board at the annual meeting on July 1. 

Cowgill has run the company and chaired the board for 17 years – far longer than official guidance suggests.

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This post first appeared on Daily mail

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Willie Walsh: Covid could prompt a British Airways sell-off

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British Airways could be spun off if Covid ravages it further, the ex-head of its parent company has said. 

Willie Walsh, who led BA’s owner IAG from 2011 to 2020, said splitting up the company could not be ruled out if one part of the business is underperforming. 

Tough talk: Willie Walsh led British Airways’ owner IAG from 2011 to 2020

BA is the biggest earner of IAG’s airlines, but its reliance on transatlantic travel has put it at a greater disadvantage than many rivals in the pandemic. 

Short-haul flights are expected to pick up much sooner than the long-distance routes BA specialises in. 

Walsh said: ‘There’s nothing to say that bits of IAG could not be sold off or cut loose. That was my thinking as CEO. If one part of the business wasn’t performing, you could dispose of that part. I don’t think that will happen, but it could.’ 

Disadvantage: Short-haul flights are expected to pick up much sooner than the long-distance routes BA specialises in

Walsh, who is head of the International Air Transport Association, said that as each of IAG’s companies has its own balance sheet, they could ‘in effect be sliced off and sold off’. 

IAG was founded through the merger of BA and Iberia in 2011.

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This post first appeared on Daily mail

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