The Intermediary Mortgage Lenders Association has urged the government to acknowledge that small landlords are the backbone of the sector.
Its own survey shows that 80% of landlords either own one or two rental properties. Only 13% are portfolio landlords with more than four homes.
The association also asked the government to acknowledge that landlords who are taking more risks will require higher returns.
Meanwhile the best way of driving up standards in the PRS, according to IMLA, is to boost supply, so tenants have the power to shop around when looking to rent a property.
Kate Davies, executive director of IMLA, said: “The government’s long-term plan to massively boost much-needed social rented accommodation is very much welcomed, but cannot come at the expense of the UK’s private landlords, who currently play a vital role in providing homes for 20% of the country’s households.
“IMLA is reiterating a call we have been making for some time, for policymakers to take action to ensure those landlords feel confident enough to remain in the sector and continue to offer this essential housing for the country’s renting population.
“Continuing to heap expensive regulation on the sector risks pushing out more of the smaller landlords who make up the lion’s share of providers, creating a vicious circle of fewer rental properties available and higher rents for tenants.”