Investment Property Databank (IPD) figures reveal the second lowest monthly total return on record.

IPD research for September 2007, released today, shows total returns on the monthly index fell by 1.2% in September, with capital growth of -1.6%.

The severity of the correction is demonstrated in the fact that the monthly total return was the second lowest in the history of the Monthly Index since 1990.

Capital value growth is also at a low.

The monthly yield impact has only been worse on two other occasions - in May 1990 and January 1991.

Worst on record
In terms of sectors, retail and industrial saw total returns the worst on record.

Industrial and retail delivered total returns for September at -1.4% and -1.3% respectively.

The office sector delivered a total return of -1%.

IPD also found that the negative yield impact demonstrates the fast change in sentiment over a matter of months.

IPD suggests ‘valuers are marking down the market as a whole’ and shows an ‘unprecedented fast change in sentiment.’

Statistics for rental growth show the office sector is ahead with rental growth at 0.8% compared to 0.2% for retail and 0.1% for industrial.