Capital growth in the UK real estate market fell to 0.4% in the second quarter of 2011, the lowest rate of growth since Q2 2009, according to the IPD UK Monthly Index. In June, the index booked capital growth of 0.2%.

Malcolm Hunt, UK and Ireland Client Services Director, said: 'While capital growth has been positive for the 23rd consecutive month, it is fractional, and likely to remain under pressure until the secondary market improves.'

'Yield compression has continued at a trickle, and rents have failed to pick up the slack, remaining flat for the quarter. Continuing wider macro-economic turmoil, and the uncertainty surrounding the secondary market, has meant that outside of London growth remains largely flat or negative, as investors and occupiers continue to shy away from risk.'

Sector level rental performance remains unconvincing. Rents in both the retail and industrial sectors continued to decline, recording -0.1% and -0.2% for the quarter respectively. Rents in the office sector remained positive, at 0.4%, though outside of London fell away.