A review, commissioned by the government and headed by the University of York's Julie Rugg, has concluded that several steps should be taken.
They include changes to taxation - including stamp duty - to encourage landlords to purchase more properties, as well as introducing a complaints procedure for tenants in order to minimise disputes.
Housing minister Margaret Beckett welcomed the report, noting the important role that rental plays in the property market.
"Many of us have rented a house at same stage of our lives and it's crucial that we have a high quality sector that works well for both landlords and tenants," she said.
And Ms Beckett added that although the majority of those renting are satisfied, there is a minority of unscrupulous landlords.
The National Landlords Association also backed the review, stating that it dispels claims of a crisis in the buy-to-let sector.
