UK landlords could see their taxable profits rise by an average 13 per cent as a result of the reduction in mortgage relief and other changes, online letting agent Upad claims.

The mortgage tax relief changes brought in last month mean that interest relief on BTL mortgages is being phased out to the basic tax rate of only 20 per cent by 2020.

Research by Upad also found that 20 per cent of landlords will increase rents to help mitigate the cost of their new tax bill, meaning tenants could face a permanent increase in rent.

Upad's chief executive, James Davis. said: "Despite the changes being gradually introduced over the next four years, our latest research shows already how out-of-pocket landlords are set to be by 2018/2019 alone, as they see a big rise in their tax bills and a substantial hit to their profits.

"Those who are in the higher rate tax bracket of 40 per cent will be the worst affected, but others could find themselves being tipped into the higher tax bracket despite their income not having increased, which will leave many renting at a loss and subsidising their property every month."

He suggested that since rent rises are likely to be 'deeply unpopular with tenants, landlords might consider adding some cost-effective, tax deductible improvements to their properties like complimentary Wi-Fi, or a bathroom. That might 'justify asking for an increase.'

He said that landlords can reduce their costs and look to boost their rental income in a variety of ways: by selling off some low yielding property, reducing some mortgage payments or setting up as a limited company.

Mr Davis added: "Another option is to switch to fully-furnished holiday lettings as these are exempt from the tax changes so you can still claim full mortgage interest tax relief."

He also suggested that landlords look at ways to negotiate with their letting agent and be wary of those agents who attempt to increase their commission or other fees, ahead of the forthcoming ban on tenancy fees in England.