More than half of private landlords responding to a new survey say recent tax changes in the rental market have had an adverse impact on their property investment plans.

That is the finding from a new study by the London School of Economics (LSE) for the National Residential Landlords Association (NRLA).

Over 1,400 private landlords across England took part in the survey, with 52% identifying tax changes as a key factor deterring them from making further investment in the buy-to-let sector and acquiring more properties.

Recent changes have included restricting mortgage interest relief to the basic rate of income tax, a 3% stamp duty levy on the purchase of additional homes and a reduction in capital gains tax to 18% for everything other than on gains from the sale of residential property.

Overall, a third of respondents said the reform to mortgage interest relief was the tax change having the greatest effect on the operation of their rental business. Of this group, 39% said the change meant that they were not proceeding with planned future purchases whilst 31% said they had put plans on hold, and 28% said they were taking steps to leave the sector altogether.

Some 27% of landlords said that the stamp duty levy was significant; followed by changes in the tax treatment of furniture and fittings (26%), and in the capital expenditure allowance (24%).

Ben Beadle, chief executive of the NRLA, said: “The NRLA will be studying this report carefully as it prepares detailed plans to support investment in the sector.

“That said, it is clear that recent tax increases have deterred investment in the sector. With the demand for homes to rent outstripping supply this will only hurt tenants as they face less choice, higher rents and find it more difficult to save for a home of their own as a result.”

Christine Whitehead, Emeritus Professor of Housing Economics at the London School of Economics and a co-author of the report commented: “Our work on taxation of landlords across Europe (also in the report) suggests that as a result of the changes in taxation since 2015 individual landlords in Britain are being increasingly disadvantaged when compared to corporate landlords and other investment types.”