Property fund suspensions..?

Share This Post

M&G’s property funds have been suspended since December last year, and this month some £12.8billion of investor’s money has been frozen across various other property funds.

Why is this?

To increase consumer protection, the city regulator, The Financial Conduct Authority, introduced a rule last year which required  property funds to automatically suspend additional contributions and withdrawals when their valuers find material uncertainty over the pricing of 20 per cent or more of their assets.

‘Material uncertainty’ exists when independent valuers are unable to value the property assets of a fund with the same degree of certainty as would otherwise be the case in a healthy market.

The Royal Institution of Chartered Surveyors are holding weekly meetings with the UK’s major valuation houses to discuss market activity to determine when market activity is at a level where there is a degree of confidence that the material uncertainty clauses can be lifted.

Unfortunately, the government’s popularist policy of suspending forfeiture provisions within leases on both residential and commercial lettings has prevented the use of statutory demands to take rent, which is widely believed by property professionals to have significantly contributed to the ‘material uncertainty’ in values, afterall, what is a rented property worth when the tenant can remain in situ without paying any rent or face any consequences?

The solution?

When 80 per cent of a fund’s assets are in sectors of the market where the clause no longer applies, they are allowed to re-open, however a material risk exists that pent-up demand to withdraw funds could further destabilise pricing and force downward pressure on valuations.

More To Explore:



Unfortunately the Investment & Retirement Solutions Ltd ‘great unlocking’ has had some unintended consequences as 30% of our independent financial advisers and 50% of our


COVID Secure Meetings

Following the Prime Minister’s announcement on Monday 12th July confirming “Freedom Day” and having had the opportunity to review the proposed guidance and rules published


Our posts are intended as financial education and financial information, not as financial advice, and are only suitable for UK residents. Always take professional, independent advice before acting on any information.

Investment & Retirement Solutions Ltd is authorised & regulated by the Financial Conduct Authority.

The value of investments and income from them can fluctuate (this may partially be the result of exchange rate fluctuations) and investors may get back less than the amount invested. Past performance is not a guide to future performance.

Your home is at risk if you do not keep up repayments on a mortgage or other loan secured on it.

The Financial Conduct Authority does not regulate taxation and trust advice, will writing, advice on deposit accounts, some types of offshore investment, some aspects of buy to let mortgages, commercial finance or offshore mortgages.

Levels, bases of and reliefs from taxation may be subject to change and their value depends on the individual circumstances of the investor. Unless specifically stated otherwise, our posts do not allow for the additional taxation powers which may be levied by the devolved governments.

All information is offered in good faith and is believed to be correct at the time of publication however it may be superseded following publication. E. & O. E.

Would you like to know more?

drop us a line, it's good to talk

Skip to content