Reinstating mortgage interest relief for landlords would solve the nation's ongoing rental property supply crisis and raise �400 million for the nation's coffers, it has been revealed.

Analysis by Capital Economics on behalf of the National Residential Landlords Association showed that reinstating MIR would help add a further 110,000 properties to the private rented sector PRS as investors return to the market.

'Tax hikes on landlords, exacerbated by rising interest rates, have deepened the supply crisis. And as this research demonstrates the situation is unlikely to improve until and unless it is reversed,'� says NRLA chief executive Ben Beadle (pictured).

'A radical rejection of these damaging policies is necessary to help stem the tide of lost rental properties, limit rent rises, and boost Treasury revenue.'�

Capital Economics also found that scrapping the mortgage interest reforms could reduce future rental inflation in the sector and reduce financial pressures on landlords planning maintenance and improvements.

�1 billion

Its modelling (PDF download) also suggests '� somewhat worryingly for Ministers '� that if the base rate remains above 2.5% for another four years as predicted, some 735,000 unprofitable properties are likely to be squeezed out of the PRS and lead to HMRC losing �1 billion in tax revenue.

The NRLA is calling on the Government to review the impact of recent tax rises on the sector of private rented homes and the cost of accessing rented housing.

It has criticised the 2015 decision by then Chancellor George Osborne to cut back MIR, given the Institute for Fiscal Studies has previously argued it is wrong to suggest landlords have been taxed more favourably than homeowners.

"In 2015 the Government said it wanted to '�create a more level playing field between those buying a home to let and those buying a home to live in','� adds Beadle.

'In doing so it hiked costs for responsible landlords and totally ignored the burden it would create for renters. '

In January this year some 40,000 people signed a parliamentary petition calling on the Government to reinstitate MIR.