Chancellor Jeremy Hunt must tackle rising interest rates or risk losing hundreds of thousands of homes from the private rented sector.
The warning comes following the 13th consecutive increase since December 2021 with the Bank of England increasing the base rate to 5%. This will mean a significant increase in costs for landlords with buy-to-let mortgages.
The NRLA is now asking the Chancellor to reinstate Mortgage Interest Relief for buy-to-let landlords, to encourage them to remain in the sector and continue to provide the homes to let that the country so desperately needs.
It also wants the Government to reverse its decision to freeze Local Housing Allowance (LHA) rates to support those tenants struggling to make ends meet.
Ben Beadle, Chief Executive of the National Residential Landlords Association, said: “The decision will put further pressure on renters and landlords alike.
"A total of 85% of buy-to-let mortgages are interest only, making them especially hard hit by rising mortgage costs.
"Some landlords have seen mortgage payments rise by almost 240 per cent since December 2021.
“Analysis for the NRLA has found that 735,000 rental properties could be lost across the UK if interest rates peaked at five per cent, further exacerbating the supply crisis renters are facing.
“It makes no sense to have a tax system that discourages investment in the homes renters need, and benefit payments that fail to provide vulnerable tenants with the assurance that they can afford their rents.
“The Chancellor needs to take urgent action to support the rental market by reintroducing mortgage interest relief in full and unfreezing housing benefit rates.”