Lee Dribben, chairman of the Residential Landlords Association, explained that this, combined with changes to capital gains tax which come in to force in April could have an adverse effect on the market.
He said: “One great unknown is whether the April capital gains tax changes will result in a glut of investment properties for sale.
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“Overregulation by central government and local authorities poses the greatest threat to the private sector lettings market.”
Dribben added that while experienced buy-to-let landlords will continue to expand their property portfolios if they feel they are getting value for money, it might not be the best time for new investors to enter the market.
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He said overregulation combined with the potential problems of rogue tenants will give new landlords “sleepless nights”.
A recent study by Birmingham Midshires found that the average total return for a buy-to-let investor in 2007 was 16.3 per cent.
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