Peers backed a Labour party amendment to the enterprise and regulatory reform bill, which would oblige letting agents to sign up to a redress scheme for landlords or tenants who felt they had been wronged by an agent.

Unlike estate agents, letting agents are currently unregulated.

Calls for legislation have gained volume in recent years, as renting property in the UK has grown steadily. There are now 3.84m households in the private rented sector in England, compared with 1.9m in 2001.

Labour peer Lady Hayter said: “The Government says they want to increase the private rental sector but you will only bring new landlords if they feel confident that a letting agent will look after their property properly, will choose good tenants and won’t run away with their money. This is good for the private rental sector,” she added.

Ian Potter, managing director of the Association of Residential Lettings Agents, said:

“The news that the House of Lords is in favour of regulating the lettings industry marks a significant win for professional lettings agents up and down the country, who are doing a good job every day, but whose reputation is being tarnished by rogue agents.

“This is to the detriment of consumers at just the time when the sector is increasing in size and importance. At ARLA, we have long-campaigned for better regulation to protect both tenants and landlords, and we hope that the right decisions are reached as this Bill progresses through its final stages.”

The amendment will go to a third reading at the House of Lords on March 18, before going back to the House of Commons after Easter.

The vote in favour of regulation came on the same day as the advertising watchdog warned letting agents they must disclose all tenancy fees when marketing properties for rent.