The Government is facing yet more pressure to reverse controversial changes to mortgage interest relief, according to Paragon Mortgages.

The lender’s second quarter PRS Trends Report, based on interviews with 201 experienced residential landlords, asked landlords to rank the action they would most prefer the new Government take to help with their residential lettings business.

The highest-ranking answer was a reversal of the income tax relief changes.

The second-ranked answer was for no more change, while the third most popular action landlords would most prefer the new Government to take is an exemption from Capital Gains Tax and Stamp Duty for landlords moving properties into a limited company structure, a strategy that 11% of landlords reported having already taken in the second quarter to help mitigate the impact of the tax changes.

The other most commonly reported actions taken by landlords in the second quarter was to increase rent, with 20% doing so.

Another 20% said they would sell or buy no more property, while 18% would repay some or all of the mortgage.

John Heron, managing director of Paragon Mortgages, said: “Having taken active steps in preparing for a difficult period of transition as the tax relief changes continue to be phased in, landlords are now facing up to the challenge ahead.

“Higher tax charges for landlords have combined with a general increase in uncertainty to drive confidence levels down.”

The call comes after the Residential Landlords Association called on the Government to “dispel the myth” of landlords raking it in and said it wants MPs “to scrap the decision to tax a landlord’s turnover, rather than profit, abandon the mortgage interest relief changes and to no longer apply the Stamp Duty levy on additional homes where a property is adding to the supply of housing available to rent”.