Standard Life suspended trading in its UK property fund after reducing the value of the fund by writing down the value of property by 5%. This set off a wave if liquidation that resulted in the fund being suspended. The management clearly read the press and listened to the politicians way too much. It makes no sense to devalue their property holding because of BREXIT and the pound falling from 150 to almost 130. When the pound fell to par in 1985, Americans were pouring in and buying everything they could (I was one of them) while the Brits thought we were crazy for property was too expensive in their view.
I have told the story before that I bought a 328 Ferrari in London for about £30,000 when the pound fell to $1.03. The same car in dollars was selling for about $50,000. The pound had been over $2 when Ferrari priced what they would sell that car for to Brits. Since the pound fell so hard, the Italians raised the price to £45,000. Then the pound rallied back to almost $2. I drove the car in London for about two years and then sold it used for about $50,000. This created the false assumption that a Ferrari was a great investment and people began buying and storing them. It was just the currency — not the car.
Here we have the same stupid devaluation of a property fund based upon BREXIT. This is really brain-dead. The currency has dropped about 13% so far. Add the 5% write-off because they ASSUMED they lost money and you are at nearly a 30% drop. Property in London is declining, not because of BREXIT, but because of the crazy changes in laws and hikes in taxation. However, to make the assumption that property is suddenly worth 5% less because of BREXIT is sheer madness.
