Landlords are worried measures from the Renters Reform Bill will drive investors out of the sector, The Telegraph reports.
Section 21 will be abolished in a bid to give tenants more security, although landlords will be given a six-month warning before the ban takes place.
Peter How, an author and landlord with around 40 properties in Yorkshire, said: “The only reason buy-to-let mortgages were introduced is because there was the option to take back possession of the property.
“Taking that away undermines the main method of financing for landlords.
“Ultimately it will result in fewer landlords, less stock and higher rents.”
The question is whether the eviction process will be sufficiently improved to help landlords evict tenants when they have a reason.
Currently the issue with Section 8 evictions is it can take multiple months to go through, leaving investors out of pocket for extended periods of time.
One change being introduced is a “powerful new Ombudsman” designed to resolve disputes between landlords and tenants more quickly – the details of which can be read here.
Of 12 major buy-to-let lenders only Skipton Building Society, Paragon, Santander and Nationwide Building Society have pledged to keep their policies the same after the eviction ban.
Investors will effectively be an “endangered species” if they don’t have the right to repossess their properties, said Vanessa Warwick, a property investor of 30 years and co-founder of landlord forum Property Tribes.
She said: “Section 21 gave lenders and landlords confidence they could regain possession. I fear some banks will see the ban as an increased risk and pull buy-to-let deals or put up rates in response.”