A property tycoon facing court after banning Indian and Pakistani tenants because he claimed they left homes smelling of curry said the legal action will put off buy-to-let investors.

Fergus Wilson believes the decision by the Equality and Human Rights Commission (EHRC) to seek an injunction against him could add to shortages in the rental sector.

He said: "This action will cause many would be buy-to-let investors not to purchase a property at all, thus adding to the overall shortage of rented accommodation.

"The would-be buy-to-let investor will take the view I am not going to purchase an off-plan house to rent out because the EHRC are going to force me to take someone who will devalue my property due to curry smells."

The EHRC applied for an injunction at Central London County Court after Mr Wilson directed a lettings agency not to rent his homes to "coloured" tenants because of curry smells left at the end of the tenancy.

The EHRC last month demanded a written assurance from Mr Wilson, long regarded as Britain's biggest buy-to-let investor with hundreds of properties in Kent, that he would not refuse to let a property based on race, colour, nationality or national origins.

Despite having to call in police following online abuse labelling him racist, Mr Wilson refused to back down and insisted his motivation in enforcing the ban was to avoid financial risk.

Although Indians and Pakistanis were not included on his latest lettings criteria list, dated June 1, Mr Wilson said he would still not house them due to previous paying out to rid homes of curry smells.

He insisted he is not racist and that he has rented to "non-white" people, including Gurkhas. He said his stance is based on an economic judgment.

Zero-hour workers, single parents, "battered wives", housing benefit recipients and mothers and fathers with children under 18 are among others on his list.

Mr Wilson said: "There has to be a financial consideration and the tenant must be a person of sound financial status who qualifies for a rent guarantee, which is actually an insurance product."

EHRC chief executive Rebecca Hilsenrath has said it has asked the court to issue an injunction against Mr Wilson if it agrees his lettings policy contains unlawful criteria.