Property investors are increasingly looking to regions outside London for growth, according to a new report.

Research by accountancy firm RSM found half of respondents felt London prices would rise in 2017 albeit at a slower rate, while 31% thought they would plateau an 14% anticipated a drop.

Instead of focusing on the capital, 28% said they were casting their net wider in the South-East and 18% said they favoured the North-West, while the South-West and West Midlands came joint third among 11%.

The survey, conducted among property investors, developers, lawyers, bankers and agents, found 70% anticipated that the cost of borrowing would remain the same over the coming year, despite rate cuts, while 8% believed that borrowing costs could fall even further.

Howard Freedman, RSM’s head of real estate and construction, said: “2016 has been an eventful year for the UK real estate sector. There was significant growth in 2015 with a considerable number of deals concluding throughout the year.

“At the beginning of 2016, however, the sector paused for breath. Transaction levels started to fall amid concerns that the market was topping out.

“The EU referendum added further uncertainty and changes to Stamp Duty Land Tax rules and updates to income and inheritance tax also cooled the residential market, particularly in Central London.

“Our latest survey shows that despite these setbacks, there is a degree of optimism around price growth in 2017, with a renewed interest in the prospects for the UK regions.

“There is of course concern around a lack of investor interest following the Brexit vote, but our survey suggests that over the long term the UK real estate market remains one of the more favourable opportunities for both domestic and overseas buyers.

“Now more than ever, investors and developers must focus on the fundamentals of property investment: location, sub-type and quality of tenant. Those that hold their nerve and stick to these principles will reap the biggest rewards in the year ahead.”