UK pooled property funds saw net outflows of money in the third quarter of 2007, the first quarterly outflows since March 2003.

However, funds still saw a significant amount of money coming in, showing confidence the disparity of opinion over the long-term prospects for property.

According to figures from the Association of Real Estate Funds, which collects data from 63 funds with a net asset value of £43bn, UK pooled property funds saw £939m of outflows in the third quarter, with inflows of £801m. This represents a 52% drop in the level of inflows, compared to the same period last year, and a 418% increase in the level of outflows.

Tumultuous times

Nick Cooper, chairman of AREF, said: ‘Despite three tumultuous months in the financial markets there are encouraging trends contained within this report. Returns from pooled property funds held up well in Q3 at 6.9% year on year.

‘The pooled property fund sector is showing continued support from existing investors who recognise the merits of these vehicles as long term holdings in a diversified pension fund.’

Of the money coming into funds, £14m came from new investors, compared with £352m in the same period last year. Existing investors put £196m into funds, less than the £605m for the same period last year but more than the £166m for the second quarter of 2007.