UK - Investor sentiment is significantly more uncertain and pessimistic than it was last year, according to ING Real Estate Investment Management.

Only 8% of clients who responded to its annual investment survey said they held an optimistic outlook for the real estate market, compared with 64% last year.

Furthermore, 34% of respondents said they were pessimistic and more than half (54%) said they were uncertain, up from 9% and 27%, respectively, in 2006.

Return expectations have also changed considerably over the last 12 months with almost half considering 7% or less an acceptable rate of return going forward.

This contrasts with last year's results that showed 60% of investors were targeting at least 10% as an acceptable return and a further 27% expecting to achieve more than 11%.

Charles Follows, head of UK research and strategy at ING Real Estate said last year's optimism had indeed abated.

But he denied that the UK property market was on the brink of "a repeat of the early 1990s".

Instead, Follows believes the economic environment is different to that at the start of the last decade, particularly where UK GDP growth is concerned.

ING Financial Markets forecasts the level of GDP growth to remain largely unchanged over the coming three years, unlike the freefall into negative values as was experienced in the early 1990s.

However, ING REIM's latest forecast certainly supports the lower expectations, placing total return for all UK property during the 2008-10 period at 5% - down from 8.9% last year and 10.4% in 2005.

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