Oxford's industrial market will enjoy rental growth of more than five per cent in 2008, according to agents Lambert Smith Hampton.

The company claims the current market downturn is entirely due to yield/price adjustments, and little to do with an underlying weakening in occupier markets.

Data published in the LSH Weather Map Report: Prospects for Property 2008-2011, demonstrates that current property market trends are more reminiscent of the 1970s market downturn than the 1990s property crash.

LSH head of research, Dr Arezou Said, said: "If the commercial property market takes the time to analyse current and historical market data, it will find its present fear will turn to educated caution.

"Yes, we are expecting capital values to fall by a further 10-12 per cent this year, but the extent of the fall in the investment market resembles that in the early 1970s, rather than the 1990s.

"Occupier markets are also more balanced than they were in any previous downturn, and we have a tighter development pipeline than in either period."

As a result, the industry should be exercising caution, rather than panicking about a potential recession.

LSH research shows tenant demand is healthy and rents are still rising, with Oxford's five per cent figure healthy, although behind Reading's predicted 7.7 per cent.

The office market is expected to have peaked, and will see a slowdown in the next three years, but rental growth will be positive while retail will remain challenging in 2008, but will recover from 2009.

The industrial market is expected to remain stable.