UK commercial property is set to suffer more bad news this week with the publication of the UK annual property index from consultants IPD. Daily Telegraph

Experts who follow the index are confidently predicting that it will show a slump of 15% in the capital value of UK property from June, when values peaked, including a 4% to 5% fall in December alone, revealing that the second half of 2007 was one of the worst in recent memory.

Taking 2007 as a whole, capital values are thought to have slumped 10%. The pain being felt by property investors has been reflected in the falling share prices of leading UK property companies such as British Land and Land Securities, which have dropped 45% and 36% respectively over the past 12 months.

The only relief has come from a 5% uplift in rental income over the 12-month period, which will mean the total return from property in 2007 – capital value plus rental income – will see a fall of 5%.