Private landlords are calling on the Chancellor to take action in this year’s Budget by providing more homes for rent to help buy-to-let owners.

It is estimated that one in five households will be in the private sector by 2016 with 4.1m British adults unlikely to ever buy their own home because of problems raising a sufficient deposit.

The Residential Landlords’ Association is arguing that relying on institutional investment will not be enough to secure the homes the country needs.

With nearly 90 per cent of landlords in England being private individuals responsible for 71 per cent of all private rented households, there is a huge potential for them to expand the number of properties available for rent.

To encourage this, the RLA is calling for measures to enable landlords to more easily develop on small plots of unused public sector land that is too small for institutional investors.

RLA chairman Alan Ward said: “Whilst the private rented sector is the only housing sector to be growing, much more action is needed to boost the supply and quality of homes available to rent and keep rent levels down.

“Our recommendations would help unlock the enormous potential for the army of individuals who rent out property to expand and create more homes and through this, they will be feeding more resources back to the Treasury.”

In its Budget submission, the RLA is also proposing reforms to the way the sector is taxed so that renting a property is treated as a trading activity with consequent allowances to promote improved standards and incentives for investment.

A specific proposal is for individual landlords to be allowed to pool their developments together to collectively reach the £10m threshold to qualify for the Government’s housing guarantees scheme.

To provide certainty, the RLA is calling on all political parties to rule out any suggestions of restricting rents through rent controls or index linking rents given the damage that this would do to investment in the private rented sector.

The Budget 2014 will take place on 19 March.