Almost nine out of ten (88%) respondents in a survey of British Property Federation (BPF) members are confident about the performance of the UK real estate sector over the next 12 months. Two thirds also think that their company’s financial performance will be better than 2015.

Six out of ten (60%) property owners and investors are planning to increase their company’s development activity and 59% are planning to be a net investor in property assets in 2016.

The survey, commissioned by BPF and Grosvenor Britain & Ireland (Grosvenor), also found that 26% of respondents believe that the UK residential property sector will perform the best in terms of financial return in the next 12 months, closely followed by the office (21%) and industrial (20%) sectors.

The top three challenges for owners and investors over the next 12 months will be high construction costs (cited by 67%), the planning system (61%) and the uncertainty around Brexit (42%).

Greater London continues to attract the highest levels of investment with more than half of respondents (53%) saying that they will be increasing their investment in London over the next 12 months. A third will be investing in South East, Anglia and the Midlands. One in five will be investing in EU countries.

In London, the most popular request for the next Mayor is to boost housing supply through assembling and developing public land.

Commenting on the findings of this inaugural BPF Grosvenor Leader Sentiment Survey, Martin Codd, head of the property entrepreneur group at Penningtons Manches LLP, said: "It's encouraging that this survey is still so positive over the returns to be made from the residential sector, given the challenges currently facing this sector. Not only are the SDLT surcharge changes kicking in but the tax relief changes will also begin to bite in 2017. Together with the uncertainty of a Brexit these are all likely to create a downward pressure on returns. Let's hope these headwinds are temporary and don't dent investor confidence.”