THE rush to snap up buy-to-let properties in York as a pension investment has left tenants better off with better maintained houses and stable rents, according to York letting agents.

But a glut of two-bedroom flats in the market has left owners looking to enrich their retirement vulnerable, as renters look for the best properties at a competitive price.

Their comments come as a survey by the York-based Joseph Rowntree Foundation, which funds academic studies into social trends, reveals increasing numbers are buying property as a form of pension planning.

But researchers at the University of York warn landlords should remain cautious as the recent boom follows a period of low interest rates, poorly performing stocks and a rise in demand for rental properties.

Leslie Beattie, who owns estate agents Quantum, said the buy-to-let market continues to grow as investors join the marketplace, but said added competition was driving up standards and expectations.

She said: "Some people are even cashing pensions in to do it, while others are entering in to the market in their 40s because their pensions are not worth what they thought.

"We are also finding that property owners are releasing equity from their property to buy others that can be rented out at a profit."

Victoria Lawton, of Lawton Letting, said landlords have to be "realistic" and that those with two-bedroom flats in their portfolio were particularly vulnerable to competition.

She said: "The reality is that yes the market is buoyant, we have had record month on record month, buy landlords have to be realistic because there are so many first-time landlords."

She said many people who expected to make a massive amount of money from capital growth or rental income were quickly becoming "disillusioned" by the demands of the market. In the Joseph Rowntree Foundation study, David Rhodes and Mark Bevan, of the Centre for Housing Policy, found that a large number of buy-to-let landlords were looking to fund their retirement.

But they decided that it was unclear how owners would respond to different economic conditions such as a rise in interest rates or how tighter margins would affect them.

Updated: 10:49 Monday, October 13, 2003