Are affluent investors still interested in property as an asset class? Yes, according to new survey by Barclays Wealth. In spite of the recent turmoil in real estate twice as many respondents (35 per cent) say they plan to increase their property allocation over the next two years, compared to those planning to decrease it over the next two years (17 per cent). Entitled 'Prospects for Property: On Solid Foundations?', the report surveyed more than 2,000 high net worth individuals across different markets globally.

The study, for the first time since the start of the recession, reveals wealthy investors' attitudes towards residential and commercial property investment. It shows that this renewed confidence is global, with investors in nine out of the ten largest markets surveyed planning to increase their allocation to property over the next two years despite the risk of a potentially slow recovery. Still many advisors to the affluent, including Barclays Wealth, believe investors should take a cautious approach to avoid overexposing themselves to property.

"The tumble in property values has shaken even the most seasoned investors' confidence. Despite this, these findings suggest that investors believe we are approaching the beginning of the end of the downturn. It appears that those surveyed are prepared to not only exploit undervalued opportunities, but also to commit further to property over the next two years in the belief that they will benefit from favourable returns,” says Rory Gilbert, Managing Director and Head of UK High Net Worth, UK & Ireland Private Bank at Barclays Wealth.

The report sheds light on investors' motivations for choosing to increase their investment in property. The most common reason is the belief that property has better long-term prospects than other asset classes (25 per cent). This is followed by investors feeling that recent price falls have led to property being undervalued (23 per cent).

Still, investors are urged to be cautious and diversified. “Wider market data suggests that initial indications of recovery in property could be a false dawn, or the start of a slow upturn. The next 12 months will be crucial in getting a clearer idea of what the longer term property investment landscape will look like," comments Gilbert.