The proportion of people who believe property is the best long-term investment has fallen sharply over the last quarter to just 34%, according to the Association of British Insurers (ABI).

Figures revealed this was down from 49% in Q3 2010 and 54% in Q2 of last year. It marks the lowest level of confidence in property as an investment since the ABI began its survey in Q3 2008.

Nevertheless, of the 2,500 people surveyed, property remained the most popular asset class. It was followed by savings accounts, stocks and shares, and national savings products, which have all risen in favour as long-term investments as consumer confidence in property has fallen.

Helen White, acting director of life and savings at the ABI, said: “For the vast majority of savers, a pension should be a fundamental part of their savings plan. Pensions attract generous tax relief and, through life styling, can reduce risk as people approach their retirement.

“We know that over 40% of people are not taking basic steps to save sufficiently for their retirement. This may be as property, despite its fall from favour, is still seen by many as being their retirement nest egg. This is despite the dangers of investing in a single asset and the lower returns on property compared to equities for long-term investments.”