After the dampening effect of the UK budget changes to stamp duty, capital growth bounced back across all sectors, rising by half a point to measure 0.6 per cent at the end of August. The rate of all property total return increased by the same margin, to 1.3 per cent, taking the index value to 274.82 at the end of the month (271.23 in July). Rental value growth measured 0.4 per cent at the end of August, a 0.1 of a percentage point fall on July's figure. The reduced pace was reflected across all three sectors, with rental growth ranging from 0.1 per cent in the industrial sector to 0.6 per cent for the retail one.

In contrast to this short-term slowing in the rate of rental growth, over the 12-month period rental values across all properties increased 4.2 per cent (August 1996-97) compared with the 3.8 per cent rise for the 12 months to July. Both capital growth and total return across all properties continued to improve, measuring 4.2 per cent and 13.1 per cent respectively for the year to August.

Sector rankings have changed little over the month and retails continue to be the best performing sector with a return of 1.5 per cent (up from 1.0 per cent in July).