Landlords rushing to buy properties to beat the 3% stamp duty surcharge deadline, which was announced last year, resulted in a surge of new rental properties hitting the market in Q1 2016, the Countrywide Lettings Index has found.

In the first quarter of the year the number of new rental homes hitting the market was up 22% on the same period in 2015. Tenant growth only rose by 8% meanwhile which resulted in decelerating rent growth.

Johnny Morris, research director at Countrywide, said: “Quite at odds with the intentions of the policy, the first measurable effect of the introduction of the new stamp duty rate has been to increase the number of homes owned by landlords, although this will likely be a temporary affect as we see reduced investor activity in future months.

“The increase in supply of homes to rent from landlords bringing forward purchases seems to have taken the edge off rental growth. A similar increase in tenants looking for a home to rent though would indicate this may not persist. The large number of sharers, and people living with parents means there is a big store of pent up demand in the rental market.”

London experienced a 40% increase in new rented homes in the first quarter of 2016 year-on-year while tenant numbers in the capital were up 8% over the same period.  This resulted in a rapid deceleration in rental price growth to 2.9% in March, down from 7.4% the year before.