Landlords are being hit with hidden charges and inflated costs by estate agents that arrange property servicing and maintenance work through contractors, according to industry insiders.

Buy-to-let investors who use an estate agent to manage their properties usually pay a monthly fee of around 15 per cent of their rental income.

This buys a service which includes finding tenants, drawing up rental agreements and maintaining the property.

However on top of this charge, estate agents are adding markups of up to 20 per cent to contractors’ bills to boost their profits, plus demanding a cut of up to 60 per cent from contractors for the work they do.

These charges are not clearly disclosed to landlords, who ultimately foot the bill.

The Happy Tenant Company, a property management service, said agents routinely add a markup to contractors’ bills before invoicing landlords.

A recent mystery shopping exercise revealed estate agents were charging landlords six times the cost price for basic services such as gas safety checks, tenant referencing and deposit protection.

Jonathan Monjack, chief executive of The Happy Tenant Company, said the more serious problem is that agents also take a “secret commission” from the contractor.

He said some agents are more focused on finding contractors that will agree to high commissions – up to 60 per cent in some cases – in exchange for large volumes of work, than finding quality tradespeople for landlords.

“We have seen cases where a contractor provided a service for £100 and the agent billed the landlord for £120 and took a 60 per cent cut from the contractor,” he told The Telegraph.

“Essentially the agent received £80 for arranging a job that cost £100. This type of practice drives up contractors’ prices, and landlords are forced to foot the bill.”

Landlords face a range of charges depending on the type of property they own, the type of tenancy and whether they employ the services of a letting agent.