Many landlords are now in the situation of paying more taxes, an extra £1bn in tax this year compared to just four years ago as frozen tax allowances and the removal of reliefs take hold.
It is not unknown for a landlord to have to pay taxes even when making a loss.
Clive Betts, a Labour MP and chairman of the influential housing select committee, has told the Telegrapgh that reinstating tax relief on mortgage interest should be considered to make investing in the rental sector more attractive to small landlords.
He said: “The Government should review it and look at the possibility of making changes to undo what they’ve done.”
Mr Betts said the Government appears to be trying to push landlords out of the rental sector to make more properties available and affordable for first-time buyers.
He said: “There is little real hard evidence that somehow the growth of the private rented sector in recent years has been the biggest effect on prices for first-time buyers.
“The issue basically is an overall lack of housing supply. It was a knee jerk reaction to reduce the way that landlords could offset their interest payments against their income, and the consequences were simply not thought through.”