Banks and building societies have revised down buy-to-let lending forecasts for 2017 and 2018 following a "weak start" to borrowing by the sector in the early months of this year.
The Council of Mortgage Lenders (CML) said it now expects buy-to-let lending of £35 billion in 2017 and £33 billion in 2018, a decrease from the £38 billion for each year which was previously forecast, in December 2016.
A stamp duty increase was imposed on second home buyers, including buy-to-let investors, on April 1 2016.
CML director general Paul Smee said: "Buy-to-let had a weak start to 2017, and the sector's contribution to overall net mortgage lending has fallen considerably over the last year.
"While falling mortgage interest rates have helped support borrowing, tax and prudential measures are exerting pressure on the buy-to-let market.
"Following the distortion of the stamp duty change on second properties last year, we expected a slight recovery in lending levels. However, this has not materialised, and we therefore have lowered our forecast for buy-to-let lending this year and next.
"This re-emphasises the case for avoiding further changes to the tax and regulatory framework until the effect of these already in train have been properly assessed."
The CML estimated that total mortgage lending reached £20.1 billion in May. This was a 12% increase on both the previous month and on May last year.