The official scheme in Wales under which letting agents must be compulsorily licensed arrived at the fee – £3,729 for five years, a sum which has caused outrage – through guesswork.

It has admitted the sum could be wrong.

It has also revealed that it did not consult with one single agent or industry body.

In response to a Freedom of Information request from ARLA, Cardiff Council – which runs Rent Smart Wales – said: “This is a new service with no actual historical financial records to inform the process.

“At this stage, all we can do is use best estimates.

“It is therefore inevitable that some of these assumptions will need to be adjusted over time.”

In his FOI request ARLA managing director David Cox had asked key questions, including an explanation of how the licensing authority arrived at the fee; what formula it had used; whether it had considered a graduated fee structure based on the size of the agent; and who was consulted over the fee.

In its reply, Cardiff City Council says that it will neither subsidise nor profit from the scheme.

If there is an “over recovery” of fees over the five-year period, then the cost of future licences would be reduced.

Regarding the formula used to arrive at the flat fee – the cost of which has particularly angered small agents, which will pay the same as far larger ones – Cardiff says that one assumption was that 10% of rental properties on agents’ books would be complained about.

It also assumed that two-thirds of licences would be granted on the condition that the agent has Client Money Protection, a complaints procedure and Professional Indemnity insurance.

It was also assumed that 0.1% of licences would not be granted and 2% would be revoked.

The amount of investigation time involved had been calculated as part of the fee.

Cardiff said it had given “little consideration” to graduating the fee.

However, it said it was going to review this.

Regarding who it consulted, Cardiff said that it had consulted with local councils in Wales, and the Welsh Government housing policy team, directors of public protection, and “strategic housing leaders Cymru”.

Missing from the list are bodies such as ARLA, NALS, any landlords associations, The Property Ombudsman, any client money protection schemes, and – notably – any agents.