Aviva reveals it will keep its £1.8bn property fund suspended for six months

The life and pensions giant was one of seven investment firms that put commercial property funds worth around £18 billion into lockdown last month as investors rushed to pull out their cash after the Brexit vote.

Others imposed fees on those who wanted to sell.

Aviva Investors halted its fund on July 5 and said the suspension would remain in place to allow it to sell properties, which it warned can take “considerable time”.

It told investors: “Property sales may be more difficult to execute in the current environment due to market uncertainty.

“In disposing of properties, we need to ensure we act in the best interests of all investors. The suspension is therefore likely to be in place for a period of at least six to eight months from the date of suspension.”

Aberdeen Asset Managment lifted its temporary fund suspension after a week, but all others have kept their suspensions in place.

Laith Khalaf, senior analyst at Hargreaves Lansdown, called for other firms to give guidance on how long suspensions will last.

He said: “This is a big blow to investors in the Aviva fund, who are basically now being told they won’t be able to get their money out any time in 2016.

“The wider question is whether this time frame applies across the rest of the sector, and property fund investors would no doubt welcome similar guidance from other suspended funds as to when they might open again.”

Figures from the Investment Association earlier this month showed retail investors pulled £3.5 billion from UK managed investment funds in June.

Property funds took the brunt of the withdrawals, with £1.4 billion pulled out as investors headed for the exit amid fears over a crash in commercial property prices.