The introduction of a 3% stamp duty surcharge on the purchase of buy-to-let properties and the phasing out of buy-to-let mortgage interest tax relief have had a significant effect on rental property supply, according to the Residential Landlords Association (RLA).
The trade body's analysis of the government's latest Dwelling Stock Estimates suggests that a fall in private rental sector stock is down to landlords being discouraged by the tax changes.
Between March 2016 and March 2017, the government estimates that the number of private rental homes in England fell by 46,000. The RLA points out that this is the first year after the 3% stamp duty surcharge was introduced and the final year before the phasing out of buy-to-let mortgage interest tax relief began.
The Office for National Statistics data reports that the fall last year - which means private rentals account for around 20% of all stock - was preceded by successive year-on-year increases.
It estimates that the number of private rented dwellings in England stood at 4.8 million in 2017.
The RLA says that these figures, combined with a report from ARLA Propertymark which suggests demand for rental properties continues to rise, is damaging tenant choice.
"Tax hikes on the sector are choking off supply and making it difficult for prospective tenants, many of whom cannot afford to buy a home of their own, to access the homes to rent they need," says David Smith, the RLA's policy director.
He goes on to question the Ministry of Housing's corporate plan which pledges to support the delivery of one million homes by 2020.
"This is hardly an auspicious start," says Smith. "Delivering homes just for those who can afford to buy is not a policy which meets the needs of many less fortunate households in the UK."
"With corporate investors still accounting for only two per cent of the private rental market, it is time to develop pro-growth taxation that supports the majority of landlords who are individuals or small businesses to invest in the new homes to rent we desperately need,” he adds.