Nearly half of landlords could quit residential market or scale back their portfolios by 2020, Axa survey suggests

Almost half of landlords plan to scale back their property portfolios or quit the market altogether in the coming years amid worries that tax changes will hit their profits, a survey suggests.

Some 46% of landlords surveyed by Axa said they were considering withdrawing from the residential market or reducing the number of properties on their books by 2020, with four in ten (41%) believing tax changes would leave them worse off.

Following an announcement in 2015, tax relief for residential landlords will gradually be restricted from this month, with buy-to-let investors no longer able to fully deduct mortgage interest payments from their tax bill.

Landlords have already been hit with a stamp duty hike imposed on people buying second homes, which came into force on April 1, 2016.

Axa said more than two-thirds (68%) of landlords feel 'stigmatised' for running a rental business, while some felt they were being used as scapegoats for the housing crisis.

A separate report from the Centre for Economics and Business Research (Cebr) has said it expects shifts in the tax regime 'to significantly reduce the number of private buy-to-let landlords in the market'.

Gordon Rutherford, head of marketing at Axa Insurance, said landlords were feeling 'increasingly apprehensive' about the residential market.

'Few landlords are professional property tycoons – two-thirds in the UK are 'accidental' landlords,' he said.

Nearly 400 private residential landlords took part in the survey.