Property Market feels first real influence of Brexit!

In July 6, 2016
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property investmentYesterday Standard Life Investments suspended trading on its £2.7bn UK real estate fund, effectively freezing the fund from any withdrawals. This has happened as a result of large scale dis-investments from property across the markets, caused by the Brexit vote. The fund will be reviewed every 28 days and Standard Life will make an assessment as to when the fund can be unfrozen. We have been told that the fund is likely to stay frozen for a least a few months.

This is the first in what could be many more property funds to follow with Aviva and F&C likely to follow suit.  The F&C fund is used to invest in properties outside of London, and so has not experienced the same levels of withdrawals as Standard Life. So whilst the F&C fund has not been frozen yet; it is likely that the sales of property will accelerate in light of the Standard Life announcement. This could leave F&C with no alternative but to freeze their fund as well.

The impact of this means that individuals with “low risk” portfolio’s with a high percentage invested in property, could be faced with a liquidity issue and not be able to access their funds, take income or make capital withdrawals.

This supports my belief that for most clients, the family home alone represents a large enough proportion of investment in property. Therefore the investment portfolios we recommend, even the low risk ones, have very little, typically no more than 5%-8% invested in property.

This means our clients are not experiencing any liquidity issues for their investments and pensions, in fact it is business as usual and the portfolios continue to be positioned well and performing positively since the vote.

Sadly this will not be the case for many people who do not benefit from active management and regular financial advice. So if you have any friends or family complaining about how much money their investments and pensions have lost since brexit; it might be a good idea to put them in touch with us!

You can read more about the Standard Life Fund freeze here.

Disclaimer

Your capital is at risk. Investments can fluctuate in value and investors may not get the amount back they invest. Past performance is not a guide to future performance. Tax rules can change at any time.

 Please remember your home or property may be repossessed if you do not keep up repayments on your mortgage.  We give clients the option to pay for mortgage advice by fee rather than commission. Equity Release refers to lifetime mortgages. To understand the features and risks, ask for a personalised illustration.

 The Financial Conduct Authority do not regulate, Will Writing, Buy to Let Mortgages, Auto Enrolment, Tax Advice and Estate Planning.

 The opinions contained within this blog, do not constitute financial advice and no action should be taken based on this content alone.

 

Jasmine has been a qualified Financial Planner since 2008. She has also been a member of the Society of Will Writers since 2012. She is passionate about helping Clients build their wealth and achieve the financial lifestyle they desire. Her areas of expertise are that of Savings, Investments, Pensions and Retirement Planning.

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Redwood Financial Family Wealth & Estate Planners Ltd is Directly Authorised and regulated by the Financial Conduct Authority. FRN number 774469.

Disclaimers

The Financial Conduct Authority do not regulate, Will Writing, Buy to Let Mortgages, Auto-Enrolment, Tax Advice and Estate Planning. Your capital is at risk. Investments can fluctuate in value and investors may not get the amount back they invest. The guidance and/or advice contained within the website is subject to the UK regulatory regime and is therefore primarily targeted at customers in the UK. https://register.fca.org.uk/

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Redwood Financial Family Wealth and Estate Planners Ltd Company Number: 08926661
Registered Office Address: Wellesley House, 204 London Road, Waterlooville, Hampshire,