UK Private Equity Bubble About to Burst Warn Economists

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London based economists have released a somewhat worrying report of the state of the private equity sector in the form of an investment bubble. Economic bubbles normally arise when an item such as shares or property are traded at a price or price range that strongly exceeds its worth or value. A bubble in private equity could threaten a segment of the global economy, with potentially worse knock-on effects for greater Europe.

The average property price for London home at the end of last month was worth 5% less than it was in 2017, according to UK lender Nationwide. The cause was speculated to be about impending Brexit or several tax requirement changes. Unfortunately for UK property purchasers who bought with a 95% mortgage, the negative equity will have almost broken even.