AS THE value of pension funds plummet with the current volatile markets, many people are now looking at residential property investment to supplement or even replace their existing pension arrangements. Recent research showed 29 per cent of people would rather put their retirement money into property or personal savings plans than invest in pensions, despite speculation that the housing market is slowing down.

The Council of Mortgage Lenders expects mortgage lending to hold up next year, despite the worsening outlook for the economy. This positive expectation, coupled with the lower mortgage rates, makes property investment an attractive and viable proposition.

The trend for residential property investment continues to grow. Figures from the CML show buy-to-let mortgages have increased in popularity, from 24,700 loans worth £2.1 billion during the second half of last year. Six months later, this had increased to 27,900 loans, worth £2.5 billion. The Association of Residential Letting Agents reports that during the seven months to the end of September, a total of £1.27 billion was lent on 14,917 buy-to-let properties.

While just under two per cent of the mortgage market are buy-to-let properties, the true number of private landlords is probably higher. Two people, each owning a property, can live in one property while renting out the other.

www.moneynet.co.uk has a buy-to-let mortgage search facility.