Capital values fell by 3.3% in July as the UK’s vote to leave the EU hit investor confidence, according to the latest CBRE Monthly Index.

The monthly fall in values pulled year-on-year growth drown to 0.4%. It is the first significant drop in values recorded this year - in June values actually edged up 0.1% month-on-month in spite of the EU referendum happening at the end of the month.

The City of London office market was hit the hardest in July, with capital values dropping by 6.1%.

However, capital values across the central London market fell by only 4.1%, in line with the office sector across the UK.

Retail property values dropped by 3.6%, while industrial property was the best performing sector, falling only 2.2%.

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 Brexit vote has now crystallised that expectation, though it is not the only driver of it.

Rental values held steady with growth dipping to zero from 0.2% last month. In the industrial, growth of 0.1% was achieved.

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