Tenants face potential rent increases of 20-30% as a result of tax rises hitting the private rented sector, according to a former independent member of the Bank of England’s Monetary Policy Committee.

Since April 2016 a 3% surcharge has been added on the purchase of homes to rent out and from April this year the Government will begin restricting mortgage interest relief for landlords to the basic rate of income tax.

In a frank assessment, David Miles, Professor of Financial Economics at Imperial College London calls for the planned changes to be “abandoned”.

Professor Miles warns that generally “rents would need to rise between twenty percent and thirty per cent” to offset the impact of the Government’s tax rises.

Addressing the argument made by the previous Chancellor that the tax changes are about making it easier for first time buyers to enter the market, Professor Miles writes that “aspiring first-time buyers are hardly helped by squeezing the supply of rental property and driving rents up.”

David Smith, policy director at the Residential Landlords Association, commented: “Professor Miles’ assessment proves that current tax policy will be counterproductive in making rents affordable and increasing supply to meet the growing demand. It is time for the Government to think again.”