UK property returned 0.3% in February, slightly below the 0.4% achieved in January, according to the IPD's Monthly Property Index.

Capital values fell by 0.2%, marking their 16th consecutive month of decline, while rental values fell by 0.1% following two months of positive growth.

UK property returns compared favourably with bond yields in February, returning 1% in the three months to the end of February, compared with -0.1% from bonds during the same period. Property equities returned 3.7 %.

The majority of real estate markets in the UK saw a slight slowdown in February, as the impending possibility of a triple-dip recession dampened investor confidence.

Phil Tily, managing director for the UK and Ireland, IPD, said: "There are encouraging signs in the UK property market, but sentiment is vulnerable to external shocks.

"With pricing looking keen in central London, investors are increasingly eyeing regional assets, but transaction activity remains low due to continued nervousness about underlying occupier demand, which is reliant on regional economies being starved by austerity cuts.

"Many will be waiting for the chancellor's Budget next week in the hope that it includes stimulus for regional growth, because until economic performance starts to improve outside London, investors will continue to hesitate."