Money continues to pour out of UK property funds, with Brexit worries leading to the sector last month recording its highest monthly net outflow since January.
UK investors pulled a net £184.8m from domestic real estate funds in July, according to new analysis from Calastone, a fund transactions network.
That figure is the highest monthly net outflow since investors withdrew £317m during January, and marks the fourth consecutive month in which outflows have risen. Almost £1.6bn has now left property funds in the past 10 months. The sector has not recorded a net inflow since September 2018.
Calastone’s analysts put the blame for the rapid rise in outflows on the increased likelihood of new prime minister Boris Johnson taking the UK out of the EU without a Brexit deal in October.
“The unprecedented pace and consistency of outflows that real estate funds are currently experiencing can only be ascribed to the government’s increasingly strident rhetoric over a no-deal Brexit, and the associated economic chaos that would unleash, at least in the short term,” said Edward Glyn, Calastone’s head of global markets.
“Any signs of liquidity constraints within funds are only fuelling the exodus. With foreign buyers on strike, there is no new capital to support the market, so investors are choosing to sit on the sidelines until there is greater certainty.”
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