The government's stamp duty hike on second homes started to take its effect on the rental market in May as buy to let landlords were put off from buying, reducing the number of properties available to rent.
There was a 15.4 per cent drop in new rental property listings in May compared to April, according to data from crowdfunding platform Property Partner.
New rental properties listed in London were down 14.1 per cent on last month.
The number of homes available to rents fell in 91 per cent of the towns and cities analysed in the survey. Worcester experienced the largest drop in supply, down by 42.6 per cent, following a near 50 per cent surge in new listings in April. In Bedford, there was a 41.7 per cent drop in new listings in May compared to April.
The news comes after it emerged the supply of rental properties fell year-on-year in April.
Dan Gandesha, chief executive of Property Partner, said: "As anticipated, the rush of investors buying before April's stamp duty hike caused a temporary spike in rental supply, which now seems to have been swiftly reversed.
"With high and rising demand, any prolonged fall in rental supply would only have negative consequences for tenants. It's likely that rents would increase as landlords, facing less competition, pass on their additional purchase costs to tenants.
"A lack of available properties would also force more tenants into accepting poorer quality accommodation, particularly in areas with an acute shortage of stock. June's figures will show whether this is just a market adjustment, or something more fundamental."