UK real estate capital values fell in July, according to CBRE’s Monthly Index.

The 3.3% fall was widely expected and pulled year-on-year growth down to 0.4%.

Heightened economic uncertainty – especially for financial services firms – hit offices in the City of London, shrinking capital values by 6.1%.

Miles Gibson, head of research at CBRE UK, said: “Capital value growth was always expected to falter at some point during 2016, as global economic uncertainty cast doubt on the likelihood of the strong growth seen in previous years persisting for much longer.”

The UK’s Brexit vote, he said, “crystallised that expectation, though it is not the only driver of it”.

“It’s reassuring to see rental values have held firm in the face of this heightened uncertainty, a positive sign the UK occupier market remains strong, sustained by record levels of employment and low borrowing costs,” Gibson said.

“It will be some time until we understand the full impact of the Brexit decision, but the Bank of England’s base rate cut and more quantitative easing are likely to be supplemented by a similarly supportive fiscal stance in the autumn.”

CBRE said that, overall, capital value decline in the central London office market was the same as for offices across the UK, down by 4.1%.

Capital values in the retail sector fell by 3.6%, while the industrial property segment was more insulated with a lower fall of 2.2% for the month.

Rental value growth dipped to zero in July from 0.2% the month before, holding steady across office and retail sectors, including central London offices.

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