The RICS said: “Currently, anyone can set up a lettings agency without appropriate qualifications or industry knowledge.
“Not only does this mean that tenants and landlords are subject to potentially unscrupulous practice with no comeback, but it is also costing the wider economy millions every year.”
Its research suggests that setting up compulsory regulation and a system of professional standards equivalent to NVQ Level 3 would cost an initial one-off £45m plus £639,000 annual running costs, before the payback of £20m annually.
The RICS argues that new statutory requirements would pay for themselves in 2.2 years, would avoid complex red tape, and offer the consumer increased levels of protection.
The RICS says that the issue of lettings agent regulation is moving quickly up the political agenda with both Labour and the Liberal Democrats set to make it a manifesto commitment in 2015.
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.
“It’s encouraging that the introduction of professional standards and new compulsory regulation proposals being sought by RICS has support from other industry players and consumer groups, and has now received cross-party support. But what we need now is action.
“RICS has long called for a single regulatory and redress system for letting agents, which this survey demonstrates is clearly supported by the overwhelming majority of consumers. Until this happens, we recommend that tenants use a lettings agent that is a member of a professional organisation, such as RICS.”
The research for the RICS was contracted out to TBR, an economic research consultancy. It looked into the likely cost and benefits of bringing letting agents within the scope of the Estate Agents Act 1979, and also introducing statutory minimum professional standards for all agents, both residential and sales.
Market research was conducted last August by ComRes, which interviewed 1,014 adults over the telephone who have rented a property in the last two years in one of 12 constituencies.
The constituencies were: Hendon, Thurrock, Truro & Falmouth, Newton Abbot Waveney, Wolverhampton South West, Watford, Warrington South, Bedford, Brighton Kemptown, Brentford & Isleworth and St Austell & Newquay.