The Office of Fair Trading (OFT) has called for better regulation of lettings agents after identifying several consumer protection issues.

An OFT report which analysed almost 4,000 complaints made by renters and landlords found that both groups were concerned about fees levied by agents, poor service and that "surprise" charges were introduced or "drip-fed" once contracts have been signed.

The report sets out a number of recommendations for government, industry, enforcers and others in order to make the market work better for tenants. The recommendations include:

• Better compliance with legislation and in particular better up front information. The OFT would like fees to be set out in a clear tariff of charges.
• A general redress mechanism so landlords and tenants can sort out problems when they occur.
• More consistency within the industry so that common principles are applied throughout the industry, such as what information is used for pre-tenancy checks.
• Government, industry, enforcers and consumer bodies to agree a national strategy.
• Agree an enforcement strategy for traders who do not comply with the law. 
• Initiatives which make it easier for landlords and tenants to assess quality, such as recognised logos.
• Working with industry and consumer bodies to develop joint educational material such as 'quick guides' to help tenants and landlords understand their rights.

Cavendish Elithorn, Senior Director of Goods and Consumer at the OFT, said: "Our findings shows that tenants and landlords are often dissatisfied with their agents but we also know that most agents want to do the right thing. It's important that tenants ask for key information, but we also believe that Government, industry and enforcers working together can have a real impact and improve overall standards in the lettings market.

"This report sets out our view on what improvements could be made to address concerns with this market and we are keen to play our part in bringing together those involved in the lettings industry to focus efforts where they are most needed."

Scott Hammond, executive director of property frim Essential Living, said: “One of the causes of rental horror stories is the fragmented nature of the buy-to-let market. Individual landlords and agents can easily get away with flouting the rules and this is why so many people have problems renting a home.

“We are focused solely on building homes to rent on a large scale – 5,000 homes over the next decade – and we’re looking to mirror the success of the American multi-family let model. There’s a growing demand for rental and ministers are already working to encourage more institutions to fund the development of build to let just as we’ve secured backing from M3 Capital Partners.

“To oil along increased housing supply, we agree with the OFT that we need to see concrete regulation around agents and landlords that protects both sides. Together with the large-scale, professionally managed homes companies like ours will build, more controls will help housing shake off its murky reputation and build new confidence from consumers.”