Aviva's property fund may be closed for up to eight months due to uncertainty surrounding the Brexit vote

 
Helen Cahill
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Aviva, Britain's largest insurance compa
The fund suspended trading in early July (Source: Getty)

Aviva's property fund will be closed for six to eight months, meaning investors wanting to withdraw their cash won't be able to do so until next year.

In a note issued to investors, Aviva said: "Property sales may be more difficult to execute in the current environment due to market uncertainty.

Read more: Aberdeen Asset Management lifts suspension on property fund

"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 the suspension."

The fund suspended trading on 5th July due to investors withdrawing cash after the Brexit vote, depleting the fund's cash buffers.

Several funds, such as M&G and Standard Life, closed their doors around the same time, as asset managers froze an estimated £15bn-£20bn worth of funds.

Read more: Bank of England was warned over property fund trading suspensions

Laith Khalaf, senior analyst at Hargreaves Lansdown, 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, so at least expectations can be set accordingly.

"Once again this highlights the problems of investing in an illiquid asset class via an open-ended fund which offers liquidity on a daily basis, until it's forced to shut up shop at least."

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