The Office of Fair Trading has this week launched a study into the estate agency market in England and Wales, which is worth around £4 billion a year.

The inquiry, to be carried out by the OFT's Markets and Policy Initiatives division, will be a comprehensive study of buying and selling residential property in England and Wales. Issues covered will include:

- Fee structures - how they are changing and evidence on value for money.
- The nature and effectiveness of competition in the market.
- How well the Estate Agents Act is working to protect consumers.
- Comparisons with Scotland, where solicitors have a greater role in the house buying and selling process, and with other countries.

The aim of the study is to see whether the market is working well for consumers - both as buyers and sellers - and if not, to propose ways in which any shortcomings could be remedied.

John Vickers, Director General of Fair Trading said: "Buying or selling a home is the largest transaction that most people make, so it is essential that consumers are able to understand the process and the options open to them. This comprehensive study will tell us whether the market is working well for consumers."

Residential sales account for about three-quarters of total revenues of the estate agents in England and Wales. There are signs of increasing concern from consumers about the services they receive from estate agents. For example, the Ombudsman for Estate Agents (OEA) received over five and a half thousand complaints from consumers in 2001, an increase of 25 per cent on the previous year. In addition, almost five thousand complaints were made to Trading Standards Offices, mostly related to selling techniques.

The study will include customer surveys and evidence gathering from the industry. The OFT will also be seeking information from other interested parties. The study will take around a year to complete and will run in parallel with discussions between the OFT and the industry about a new code of practice.