These, and a few more key trends from the last five days, will now be fed into the grinder and compressed into an easily-digestible news sausage.
1) Property fund dominos
It all began on Monday (4 July), as Standard Life Investments suspended trading in its £2.9bn UK real estate fund in response to increased outflows following the UK’s vote to leave the EU.
The following day, Aviva Investors suspended dealing on its £1.8bn property fund, with a spokesperson stating the firm has “acted to safeguard the interests of all our investors” in order to “meet our obligations to investors wishing to redeem their holdings”.
FTAdviser predicted this would only be the start of things, with analysts suggesting Henderson, Aberdeen and Schroders were also vulnerable to the growing sense of pessimism around commercial property.
M&G became the third fund house to freeze trading in the shares of its £4.4bn property fund and then on Wednesday (6 July), true to form, the gates fell on Henderson’s £4bn property fund after more than 1,220 investors removed it from their portfolios in just over a month, according to figures from FE.
By Thursday (7 July), it was Aberdeen Asset Management’s turn to blink, suspending trading in its £3.4bn commercial property fund for 24 hours to give shareholders the option to back out of the vehicle, although they face a 17 per cent hit to investments if they do so.
The same day, Legal & General Investment Management took another route, increasing the “fair value adjustment” on its £2.5bn property fund by 10 percentage points.
Prudential joined the crew suspending their property funds this morning, with UK stockmarkets remaining fairly stable amid the turmoil, although some multi-asset fund pickers took a dim view of the week’s events.
2) Decade long deals
On the other side of the property market, mortgage lenders were reacting to post-Brexit uncertainty and the probability of interest rate changes, by introducing low rates on long durations.
Announced earlier in the week, but launched today (8 July), both Coventry Building Society and the West Bromwich Building Society offered 10-year fixed rates.
The former’s deal was the cheapest of the week - priced at 2.39 per cent at 50 per cent loan-to-value - while the latter went for 2.79 per cent for 65 per cent LTV.
On Thursday (7 July) HSBC also launched a 10-year fix, priced at 2.79 per cent for up to 70 per cent LTV, along with research among more than 1,500 UK homeowners and current house-hunters at the end of May which found almost three quarters would consider fixing their mortgage for 10 years.
Meanwhile, Barclays decided to hide its new 10-year fix - 60 per cent LTV at 2.79 per cent - away among several other rate cuts across its range.
Brokers mostly welcomed the options, but warned of the in-flexibility of locking in for such a long time.
3) Brexit blame game
The latest in an increasingly long line of things that can be blamed on the UK’s vote to leave the EU was revealed on this week’s Financial Adviser cover to be pension freedoms.
Should a new prime minister actually get round to triggering Article 50 and the ensuing two years of negotiations for orderly exit, AJ Bell’s senior analyst Tom Selby argued the government will need to cut back.
Chief among these savings will be changes to the treatment of pensions on death – allowing savings to be passed on tax-free when someone dies before 75 and taxed at the recipient’s marginal rate post-75 – which may look generous from the Treasury’s perspective.
Blair Cann, senior partner and adviser for Hertforshire-based M Thurlow & Co, said longer term it was likely that pensions tax relief will be restricted in some way, although rolling back reforms would not be popular.
Meanwhile, Xafinity analysis found one caveat-heavy ray of sunshine for those wanting to get their hands on their final salary pension scheme.
As Brexit pushed gilt yields to historic lows, defined benefit transfer values soared to record highs.
4) Nest overhaul
Sticking with pensions, several industry authorities released annual reports in the last couple of days, revealing some interesting things about how they’re run.
We found out the National Employment Savings Trust borrowed an extra £72.5m from the taxpayer in the 2015 to 2016 tax year, bringing total debt owed to the Department of Work & Pensions to £470m - almost half Nest’s total assets under management - which as of 3 July stood at £970m.
The DWP also outlined a series of measures that would radically overhaul Nest to bring it in line with pension freedoms.
5) Ombudsman complaints
As is traditional, let’s finish with some ombudsman business. This week, the Financial Ombudsman revealed a reduction in the number of complaints received concerning pension transfers delays.
Across town, the Pensions Ombudsman saw a surge in self-invested personal pensions complaints, up from 25 per cent of completed investigations in 2014 to 2015 to 46 per cent in 2015 to 2016.
