Private investor property funds enjoyed a turnaround in sentiment in January.

According to figures released today by the Investment Management Association, private investor property funds saw outflows of £77m in January, compared to £242m in December.


This was despite the fact that outflows from share funds increased from £844m to £867m. The IMA includes property funds as a sub-sector of equity funds.

The change in fortune of property funds could be seen as a sign that public sentiment regarding the sector has reached a bottom. The slowdown in outflows compared to equity funds also shows that property is once again becoming regarded as a stable, long term asset class.

Slower month

Volatility in world stock markets led to UK property outperforming equities in January, according to the Investment Property Databank monthly index.

‘January saw a continuation of the outflows experienced in the last two months of 2007,’ IMA chief executive Richard Saunders said. ‘ While it is traditionally a slower month in the run-up to the ISA season - which many are predicting will be a quiet one - broader market conditions have exacerbated this. January's outflows were concentrated in equity funds, with property fund outflows down to about half the levels of November and December.’