New legislation for estate agents and letting agents should be introduced to ensure consumers are better informed when they buy or sell a property, a report said today.
The report, by the former director general of the Office of Fair Trading Sir Bryan Carsberg, said buyers and sellers were often unaware of the experience and qualifications of different agents, and of their options when agreeing a sale.
He said consumers were often experiencing considerable frustration over delays between the date a sale was agreed and when contracts were exchanged, and did not know that they may be able to speed up the transaction.
While Sir Bryan found no evidence that consumers were being ripped off over fees, he said it was clear they had "significant dissatisfaction" with the existing homebuying system.
New rules coming in October will require estate agents to be more open with consumers and to join a redress scheme so it is easier for unhappy buyers or sellers to complain.
However, Sir Bryan said joined-up legislation should be introduced to cover all estate agents, managing agents and letting agents.
This would set out a code of best practice, requirements as to how consumers' money was protected and how their complaints were handled, and set standards for all new agents to meet.
It would also put in place a regulatory authority, which would be able to take action against agents who broke the rules.
"I think that the markets for estate agencies, letting agencies and managing agencies are not working well because clients are not well informed about the qualifications of different agents and about what to expect from them in the way of service," said Sir Bryan.
"Professionals in the industry have not been doing a good enough job in informing consumers so that they can exercise their choices effectively.
"I think regulation can make a difference: it can ensure that better information is provided and it can create a 'floor' in terms of standards, below which a complex, competitive market cannot slip without regulatory consequences."
The Royal Institution of Chartered Surveyors (Rics), which sponsored the report together with the National Association of Estate Agents and the Association of Residential Letting Agents, said the industry had made steps to tackle some of the issues highlighted by Sir Bryan.
Gillian Charlesworth, director of external affairs at Rics, said: "It is important that we all take steps now to make the necessary improvements. We need action not words.
"Government needs to acknowledge this, deliver its support for industry action and do more to protect the public."
Elsewhere in his report, Sir Bryan also argued that the government should make its controversial home information packs (Hips) a voluntary requirement.
Currently, all homeowners must commission a Hip before they can sell their property.