Zurich insurance finds people looking abroad

British property investors are setting their sights on the continental market this year in search of higher rental yields.

A survey by the insurance giant Zurich, found that nearly half (44 per cent) of the UK based commercial and residential property investors polled planned to expand their western European portfolios as it offers the best returns.

Central Europe was also popular with 29 per cent of respondents believing the region would provide the highest rental yields in the coming year, the Times reports.

Richard Elliott, head of property investment at Zurich, explained that more and more investors were looking abroad as UK market conditions tightened.

"At the moment it's a trickle but there are many more planning to go abroad," he stated.

"In the UK it's a very hard market with heavy demand for sites, little property available and more investment coming in all the time, which means returns and yields are reducing bit by bit."

Mr Elliott added that Central European countries such as the Czech Republic, Poland and Hungary would become increasingly popular as land and tax reforms made them more investor-friendly.