Tougher regulation of letting agents would help to generate more than £20 million of benefits a year to the UK economy, research from surveyors has suggested.
The Royal Institution of Chartered Surveyors (RICS) said that a clampdown on the lettings sector, which it has previously likened to "the property industry's Wild West", would pay for itself in less than two and a half years.
RICS has warned that it is possible for people to set up a letting agency without appropriate qualifications, knowledge or understanding of the rental process, and it is not compulsory to conform to codes of conduct.
This means tenants and landlords are in danger of falling victim to rogue practices by agents, which also has an impact on the wider economy, RICS said.
The research, compiled for RICS by economic research body TBR, looked into the potential impact of bringing letting agents under stronger regulation and setting out minimum professional standards.
There are around 11,560 firms involved in lettings in the UK, although it is difficult to estimate the size of the sector because there is no single register of agents operating in the property market, the report said.
Stronger regulation would cost around £45 million to set up, including putting the right administration procedures in place and paying for training, the report said. However, these toughened rules would provide more than £20 million of net benefits every year, the report said.
These benefits include money saved for tenants which could have been lost from missing deposits as well as lessening the likelihood of them being hit by spurious charges.
Landlords will also have costs reduced because better communication by letting agents would decrease the chances of them having to waste time and foot the bill for unnecessary requests for tradesmen, the report said. They would also be less likely to leave themselves open to prosecution if lettings staff were more competent and provided better advice, it argued.
Peter Bolton King, RICS global residential director, said: "These findings demonstrate exactly why the Government needs to act, not just to safeguard the thousands of tenants and landlords who fall victim to unscrupulous practice, but also to relieve pressure on the wider economy."