The number of rental properties managed per branch rose by 8% in April, following the rush by landlords to purchase properties ahead of the Stamp Duty deadline.

However, supply was nevertheless 5% down on April last year, from 193 managed properties per branch to 183.

Demand also fell, from 36 in April 2015, and 34 in March this year, to 33 prospective tenants.

ARLA also reported that agents are seeing more landlords selling up. An average of four in April, up from three in March, pulled out of the market per branch.

ARLA managing director David Cox said: “We expect that fewer investors will be taking on buy-to-let properties over the next six months, following the price hikes, meaning that once these properties are filled we’ll see supply nosedive once again.”

The number of buy-to-let investors has risen above 1.75m for the first time after a 7% increase in the past year, according to London agents ludlowthompson, with rental income up 8% to an overall £14.2bn.

Stephen Ludlow, the firm’s chairman, said: “Investors continue to be drawn to the buy-to-let market as the returns routinely outperform those of other investments.

“Buy-to-let investments are a highly popular alternative to the volatility investors often risk when investing in the stock market.”