All property total returns fell to -2.4% compared to -1.1% in August in the Investment Property Databank’s monthly index for September making it the weakest single month since December last year.

It said mark downs in capital values on a month-on-month basis accelerated to -2.9%, from-1.6% in August, while income returns remained broadly static at 0.5%.

The IPD said that the key driver of these value movements remains yield softening, where there has been a further -2.9% increase, although rental value movements last month were also negative across all sectors.

On a three-month rolling basis the pace of decline is also picking up with total all

property returns falling to -4.8% in September from -3.9% in August.

Worst on record

While during a 12-month period the IPD said the ‘picture has also become noticeably worse as the record falls last autumn are painfully combined with the sharp dip last month to deliver a total return for the year to September of -18.1%, the worst on record’.

It said all sectors declined last month with office returns at -2.4% compared to -1.3% in August, retail returns were -2.6%, compared to -0.9% last month while industrial returns were-1.9%, compared to -1.3% in August.

Ian Cullen, co-founding director of IPD, said: ‘The charts indicate a second dip, but the underlying numbers reveal that if the first dip was yield rather than rent driven, we are not yet through the first. Not surprisingly, however, the signs of weakening occupier demand are now becoming clearly visible.’