UK property fund bans cash withdrawals

A £2bn (€2.7bn) property fund run by one of the UK’s biggest investment firms said today that a rush to withdraw money had forced it to impose restrictions on other investors looking to take their money out.

Aegon UK said 129,000 investors will not be able to access their money for up to a year because of “significant” withdrawals brought on by a slump in the property market.

The three arms of the fund – the Scottish Equitable Property fund, Select Reserve fund and Select Distribution funds – invest in property up and down the UK.

Aegon said the UK property market had suffered in recent months from the worldwide credit crunch, rising interest rates and talk of recession.

“Aegon UK has decided to take this step to protect investors following a significant level of customer withdrawals from the UK property fund market,” the firm said in a statement.

The move follows a similar step in December taken by insurer Friends Provident, which halted withdrawals from its £1.2bn (€1.6bn) property fund for six months after a rush of withdrawals.