Construction of rental homes has plunged to a 12-year low amid fears regarding Andy Burnham's property tax plans .
Just 3,455 build-to-rent projects started between April and June this year, down 80pc on the same period last year, hitting the lowest level since 2014, new figures showed.
Regions outside London bore the brunt of the slowdown, with construction falling 84pc year on year from 13,893 homes to 2,176, according to the figures from Savills and Real Estate:UK.
Analysts believe the fall was fuelled by speculation linked to Mr Burnham's tax policies.
Kate Butler, from Real Estate:UK, said rumours of significant tax and regulatory changes had been "unhelpful".
She said: "The speculation around proportional property tax or land value tax has also been unhelpful and has had similar effects to the speculation around rent controls."
The Government has sought to clarify its policy on rent controls, with Angela Rayner ruling them out and officials signalling wider property tax reform is not imminent.
However, with the Budget not scheduled until Oct 28, there may be no rebound in activity until Mr Burnham spells out his plans.
Build-to-rent has been a pillar of Labour's drive to deliver 1.5 million homes this Parliament .
This has included restarting an initiative to allocate nearly £2bn of loan guarantees to private rented property developers.
Mr Burnham himself has championed build-to-rent projects across Manchester for several years, providing financial backing to major rental housing skyscrapers across the city.
Marcus Dixon, from JLL, said political uncertainty had reinforced wider commercial pressures already weighing on the market.
He said: "The speculation definitely hasn't helped. There's a view among investors that they will just wait until all of these things settle and find out exactly the Government's position before they commit to projects."
Mr Dixon also warned that the slowdown risked undermining Labour's wider housebuilding ambitions.
He said: "All of this means that we're going to see fewer homes delivered. While it might mean we get more homes over the longer term, it makes the 1.5 million homes target seem further and further away."
Under build-to-rent, purpose-built flats are managed by an investment group, which collects rents to cover the initial construction costs and later reaps the profit.
Schemes under construction have also thinned out, with the number of homes being built nationally down 21pc year-on-year in the second quarter.
A Housing Department spokesman said: "We know how vital the build-to-rent sector is in providing homes for people across the country, and we're supporting the sector to grow."
