Pending changes to the capital gains tax could test the resolve of buy to let investors, according to Fitch Ratings.

From the beginning of the new tax year on April 6, the reduction of capital gains tax on properties sold by buy to let investor would come into play.

Fitch Ratings, the international credit rating agency, said the change would provide evidence regarding investor sensitivity when it came to the economic and fiscal environment.

Questions have been raised over the amount of investors who would be tempted to as opposed to those who would stand firm and retain their properties.

Stuart Jennings, group credit officer for EMEA structured finance at Fitch Ratings, said that capital growth incentive for buy to let investment had faded in the face of an expected decline in house prices over the coming months.

“Data on recent buy to let investor behaviour shows an increasing number 'marking time'. This may change when the new tax treatment effectively makes it cheaper to sell.”

Atanasios Mitropoulos, director of Fitch Ratings’ research team, said the private rental sector “may stabilise the property market during a benign environment” but that the dynamics were different during a downturn as "not only the affordability of home owners was suffering but also that of tenants".

“The argument that those who cannot afford to buy will support the demand for rental accommodation does not necessarily help buy-to-let investors as tenants' ability to pay may not generate sufficient rent to service the mortgage.”