Landlords would be able to appeal against the body’s decision, but if they lost it could be years before they are allowed to rent out property again.About 2.6 million properties are now let out on the private rental market and ministers are worried about a growing number of rogue landlords.

According to a report by Julie Rugg, who is senior research Fellow at the Centre for Housing Policy at the University of York, up to 50 per cent of all privately rented accommodation are thought to be below the Government’s decent homes standard, with some landlords failing to comply with gas and fire regulations and allowing properties to fall into disrepair. Common problems include broken doors and furniture, rising damp, leaking roofs and sinks, peeling paintwork and inches of grime. Tenants’ complaints are often ignored and can result in intimidation or even eviction.

Margaret Beckett, the housing minister, will propose a statutory regulator for letting agents. Many agents have no professional credentials and can exploit vulnerable tenants by offering them shoddy accommodation.

The Association of Residential Letting Agents is to propose a voluntary licensing system today, but this is likely to be overtaken by Mrs Beckett’s proposals for mandatory regulation.

The measures, which need primary legislation and will first go out to consultation, are in response to the Rugg report, which called for regulation. “Some landlords simply do not consider letting to be an activity that requires regulation, and other landlords — a very small proportion — wilfully act illegally,” it said. The Government is not expected to back Ms Rugg’s call for tax relief for substantial landlord repairs, such as new roofs, windows and floors, or changes to stamp duty to help developeres buying several properties.

The regulation of private landlords coincides with a government plan to boost the private rental market by underwriting a proportion of the rent.The Homes and Communities Agency (HCA) has invited large investors, including insurance firms and overseas companies, to support a fund to build thousands more homes for rental.

The fund, which would need hundreds of millions of pounds, would help stalled developments and kickstart the construction industry. Ministers are negotiating an incentive for big investors. The current proposal is for the HCA to underwrite any rent in unfilled properties or apartments for the first two or three years.

Housing associations are also being encouraged to invest in rental accommodation. Local authorities are desperate to find places for the 4.5 million people waiting for council homes.

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