The UK property market could witness a strong increase in transaction volumes in the second half of the year if the country’s upcoming referendum on EU membership results in a vote to stay in the union, according to asset manager Kames Capital.

David Wise, investment director in Kames Capital’s property team, said: “Thus far the uncertainty over Brexit has caused the market to slow down in terms of transactions, with a wait-and-see attitude among investors, but we could see a strong second half for property after the June vote for this reason, if the UK stays in the EU.”

Everyone was concerned about the Brexit vote on 23 June, he said, but added that no one was asking what might happen if the UK opted to stay in the EU.

Year-on-year property deal volumes were down by nearly one-third in the first quarter of 2016, Kames Capital said, as investor confidence started to weaken in a sector that had also seen strong capital growth.

Wise said there was a tendency among international investors to focus on the London and South East market, but that there were many opportunities outside the most popular regions. 

“A lot of international money remains focused on London, but there are advantages to taking a different approach,” he said.

He also said smaller lots, particularly those in the regions between £5m and £20m, could offer the prospect of superior returns and better liquidity.

Meanwhile, property investment firm JLL said a survey it had conducted revealed 60% of investors thought there would be no changes to their property strategy in the short or long term as a result of a leave vote.

The survey, which polled 53 major UK-based investors in April, showed that only 30% expect reduced allocations in UK property in the event of a Brexit.

The firm also said that a separate survey it had done in March, polling 31 international corporate occupiers, showed that almost half of these said they would need to review their UK business space in both the short or long term under such a scenario.

Chris Ireland, chief executive of JLL UK, said: “Investors are more optimistic than occupiers about the outlook if a Brexit were to occur probably because they are aware of the wider attractions that the UK property market has to global capital.”

However, there would be a period of significant uncertainty, following an out vote, he said.

Last week, Aviva Investors lowered its return expectations for UK real estate for this year to an annual 6.6% from its initial 8.7% forecast, citing a possible Brexit as one of the risks it was monitoring.

And the Investment Property Forum (IPF) said at the end of May that uncertainty around a UK exit from the EU had clouded its latest consensus forecast for the UK real estate market.

The IPF said it was hard to determine how much of the slowdown in UK commercial property was due uncertainty around the referendum, or whether the market was going through a cyclical correction anyway.