The Chancellor, Philip Hammond, announced that lettings relief will be limited to properties where the owner is in shared occupancy with the tenant.
Sam Mitchell, CEO of online estate agents Housesimple, said: “Another Budget, another blow for buy-to-let landlords. If the Chancellor wants to decimate the rental sector and send rents soaring, then he’s doing a very good job of achieving just that.
“Landlords are already leaving the sector because the government introduced a second home surcharge and cut mortgage interest tax relief.
“This latest double blow will send another shock wave through the industry and have more buy-to-let landlords scurrying for the exit door.
“By cutting lettings relief and reducing the CGT exemption period to the final nine months of ownership, any homeowners who were thinking of let to buy as an option, will now have second thoughts as they’ll likely face a much larger capital gains tax now if they do.
“And anyone who rented out their previous home, and has equity locked up in that property, will now be thinking it’s best to sell sooner rather than later if they want to avoid a massive capital gains bill further down the line.
“This decision will cut off another source of rental properties, and good quality ones in many cases, as the landlord lived there before renting.
“Although cutting lettings relief might see more properties coming up for sale, the rental market will be the loser at the end of the day.”