The UK residential investment market delivered strong returns in 2007, outperforming commercial property, bonds and equities, according to figures from IPD.

The residential market saw overall total returns to investors of 17% in 2007, up from 16.4% in 2006.

Commercial property returns were -3.4%, whilst equities and bonds returned 5.3% and 6.4% respectively.

However, over three years, both residential and commercial property delivered double digit returns.

Ian Cullen, co-founding director of IPD, said: ‘In stark contrast to last year’s performance of the commercial property market in the UK, residential investment delivered its highest return in five years, and the second highest on record – reflecting the resilience of and weight of capital deployed in central and inner London.’

Most regions produced returns of over 11%, except the South West, Midlands and Wales, at 8.1%, and Northern England, at 4.3%.

IPD unveiled its findings in the 2007 IPD UK Residential Investment Index today, which is the only index to measure residential investment property in the same way as commercial is measured.