UK property funds saw sharply higher outflows in September with new withdrawals reaching £85m, the worst monthly figure since April, according to Calastone’s latest Fund Flow Index.
The swing was driven by a sharp rise in selling activity with total buy orders falling 8.3% month-on-month, while sell orders jumped by 46%.
Edward Glyn, head of global markets at Calastone, said: “After several months where property fund outflows had moderated, September marks a sharp reversal. Buyers are not walking away in large numbers – they have been scarce for many years now – but instead it was existing holders accelerating their sales.
“The combination of high rates, weak growth and a yawning fiscal deficit that is set to be filled with more taxes rather than spending cuts is clearly making investors more cautious about the UK commercial property market. The downturn in sentiment around property is mirrored in equity funds which have just suffered the largest quarterly outflow of capital on our record.”
