IPD figures show 1.1% fall in August on heels of 1.3% in July

Property returns dropped a further 1.1% in August, according to figures released today.

Research from the Investment Property Databank (IPD) showed that UK property total returns - defined as capital value plus rental income - fell by 1.1%, compared with 1.3% in July.

One positive development was that declines in capital growth on a month-on-month basis slowed to minus 1.6% from minus 1.8% in July, while income returns remained static at 0.5%.

However, when looked at on a three-month rolling basis, total returns for all property fell to minus 3.9% in August, from minus 3.5% in July. The total return for 12 months was also worse in August than in July, at minus 17.1% compared with minus 16.1%.

All sectors continued to edge lower in August. Offices slid to minus 1.3%, while retail and industrial also worsened, to minus 0.9% and minus 1.3% respectively.

Malcolm Frodsham, director of IPD, said: 鈥淭his remarkable cycle has been faster and more synchronised than that of the early 1990s. However, the underlying feature of previous cycles is beginning to assert: that of the underperformance of offices in a downswing.鈥�

Property total returns are defined as the compounded rate of capital appreciation, net of capital expenditure and net income received, expressed as a percentage of monthly capital employed.