A National Landlords' Association (NLA) survey showing many buy to let investors plan to sell up has prompted a warning about rent rises that could price many tenants out of buying homes.
The survey revealed a fifth of landlords plan to sell up this year and commercial director of mortgages at Aldermore Bank Charles McDowell said this was not surprising in view of government measures such as reduced tax relief and higher stamp duty charges.
However, he warned, this widespread divestment could have significant knock-on effects.
He said: "The most worrying comment in the report is that most landlords will increase rents before they sell, to cover the increase in costs, due to these changes.
"This would be a disaster for tenants, especially those who are renting and have aspirations to buy their own home, as ultimately it will affect their ability to save a deposit and get on the ladder."
He added that a "healthy" first-time buyer market depends a lot on there being an equally strong rental market, otherwise it places barriers in the way of renters eventually moving on to become homeowners.
The NLA survey findings showed the divestment intention level to be the highest in a decade, and also highlighted the banning of upfront fees for landlords and letting agents as other factors driving people to sell up.
It has produced a series of videos exploring the effects of the changes. Chief executive of the NLA Richard Lambert said the government should review the impact of these taxes, and, like Mr McDowell, warned that the consequences could be higher costs and less choice for renters.
With increasing reliability on this sector, it is important that landlords are incentivised to go on offering homes to rent by the capacity to make a "reasonable return on investment", Mr Lambert argued. This, he added, can only be achieved by curbing these taxes.