Retail investors in Friends Provident’s £1.2bn UK commercial property fund have been told it could take up to six months to withdraw money because of a cash liquidity crisis. Financial Times, The Times, Guardian

Coming in the wake of similar moves at institutional funds, the step is significant as it is the first time retail investors in property funds have been forced to wait for redemptions since the last property crash more than 15 years ago.

Friends yesterday said 118,000 policyholders in its pensions and life property fund would be affected by the decision, after liquid assets dropped to just 5% this week. The Financial Services Authority has also been told.

UK commercial property funds have faced a growing liquidity crisis since the summer. Falling property values have been met with a wave of redemptions as investors look to escape the sector. Many funds held only a limited amount of money to pay back investors, meaning they need to sell property to cover withdrawals.