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LONDON-Residential property returns were significantly higher thanthose for commercial property and out-performed financial assets by a verywide margin for the third successive year says Investment PropertyDatabank

Property let on modern leases returned 17.7% in 2002, a slightimprovement on performance in 2001, and Southern England outside Londonand the South East showed best returns of 25.2%. This was due to robustcapital growth of 18.6% combined with a high rate of income of 6.4%.

Thearea with the lowest performance was central London, at 12.3%. This was theone region to see deterioration in performance compared with 2001.

Interms of types of residential property the best performing weresemi-detached houses, with total returns of 23.1%. They also benefited froma high rate of income to 6.5%. Terraced houses also performed relativelystrongly with returns of 17.8%. Maisonettes and Flats recorded the lowesttotal returns of 16.0% and 16.4% respectively.

IPD Director Dr KevinSwaddle said: ‘These results are not simply another set of house pricefigures of the sort that have been making the headlines recently. Ourresults are concerned with investment returns on property let on modernleases, net of all costs. They are directly comparable with IPD’s figuresfor commercial property and those for other investment classes.’

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