Just over third of private landlords are planning to quit the sector or cut the number of homes they let in 2020.
A survey of over 2,000 landlords shows that 34 per cent intend to reduce their investment in the market - a big rise on the picture a year ago.
And the Residential Landlords Association, which commissioned the survey, says only 12 per cent of landlords are looking to expand the number of homes they rent out, down from 14 per cent a year ago.
The fall in supply comes despite the Royal Institution for Chartered Surveyors warning that the demand for private rented homes is outstripping supply, and as Rightmove has spoken of there being “strong demand” from tenants.
Some 45 per cent of landlords told the RLA that the Stamp Duty Levy on additional properties had been a deterrent to further investment in property.
Now the RLA is calling on the government to scrap the Stamp Duty levy where landlords provide homes adding to the net supply of housing. This should include developing new build properties, bringing empty homes back into use and converting larger properties into smaller, more affordable units of accommodation says the RLA.
David Smith, the association’s policy director, says: “This is yet more clear evidence of the sell-off of private rented housing largely due to the government’s extra tax on new rental homes. It is ridiculous that when the country needs all the extra housing it can get, it penalises good landlords who invest in new homes.
“With a new government and a Budget due, we need a shift in policy to one that supports investment because otherwise there will be a growing supply crisis in the private rented sector as demand continues to rise.”