The National Residential Landlords Association (NRLA) has urged the government and the new, incoming Prime Minister to consider a reset of plans for the housing sector.

The trade body warns that the supply of homes to rent is likely to keep falling over the next year as demand and rental prices increase.

It comes as its latest survey of 708 landlords found 23% were planning to reduce the number of properties they let in the next 12 months, a rise from the fifth who said they would be making cuts when asked a year ago. 

Just 14% plan to increase the number of properties they let, which is flat on last year and 4% down on the sentiment in Q1. 

Amid the prospect of static supply, 60% of landlords in England and Wales have reported a rise in demand for rental housing in Q2. This is significantly up on the 39% of landlords who were seeing an increase last year. 

As well as this, rents rose 2.8% in the year to May, the largest annual growth since January 2016. 

This is also having a knock-on effect on other kinds of housing, as 76% of councils surveyed by the District Councils Network said landlords leaving the private rented sector or converting to holiday lets had resulted in longer wait times for council housing. 

The NRLA said government policy and tax changes had directly led to the contraction of the private rented sector. The association has urged the next PM to “end this hostility to landlords” and encourage investment to meet demand. 

Ben Beadle, chief executive of the NRLA, said: “The last six years prove that it was a nonsense to think that cutting the supply of rental housing when demand is so strong would make it easier for those saving for a home of their own. 

“Driving rents up just leaves tenants with less cash to save for a deposit. 

“We need a strong and vibrant private rental market that meets the needs of those who rely on the flexibility it provides, those who need somewhere to live before becoming homeowners and those for whom the promise of social housing tomorrow provides cold comfort today. 

“The next administration needs to reset its plans for the sector.”