The strangulation of buy-to-let by the government, which made landlords a "scapegoat" for the country's housing crisis, will contribute to a massive shortage of rental properties in the future, a leading industry body has said.

According to the Royal Institution of Chartered Surveyors (Rics), by 2025 there will be a shortage of 1.8 million rental homes in the UK. Its survey of buy-to-let investors found 86% did not plan to increase their portfolio of rental properties in 2016. Rics said this trend is set to continue for five years. Moreover, 58% more estate agents reported a drop in buy-to-let sales since May.

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In April, the Treasury increased stamp duty on purchases of additional properties — those not intended to be the buyer's main residence — by 3%. Moreover, tax reliefs for landlords, such as for mortgage interest and maintenance costs, are being cut back.

Rics said the tax changes should be reversed to support the supply of rental housing, for which there is growing demand. And it said the government should encourage build-for-rent by offering tax breaks for pension funds which finance the construction of more affordable rental homes.

"We are facing a critical rental shortage and need to get Britain building in a way that benefits a cross section of society, not just the fortunate few," said Jenny Blackburn, head of policy at Rics.

"The private rented sector became a scapegoat under the previous prime minister, and because of that it suffered. Yet with increasingly unaffordable house prices, the majority of British households will be relying on the rental sector in the future.

"We must ensure that it is fit for purpose, and the government must put in place the measures that will allow the rental sector to thrive. Any restrictions on supply will push up rents, marginalising those members of society who are already struggling."

At the Conservative party conference in Birmingham, a £5bn ($6.47bn, €5.76bn) package of funding for housebuilding was unveiled by ministers. An extra £2bn of borrowed money will be made available to bring public land with planning permission up to scratch so much-needed housebuilding can take place.

A further £3bn of previously announced funding would be directed into a Home Builders Fund. Of this, £1bn will be short-term finance made available to smaller builders for 25,500 new homes by 2020. And £2bn from the government's infrastructure spending will be used over a longer period of time to deliver 200,000 more homes.

UK Housing