A London agency and one of its directors have been banned from operating in the estate agency sector and an employee given an official warning by the Office of Fair Trading (OFT).

Patrick French and east-London firm Lloyds Residential Property Services received prohibition orders after it emerged that they did not notify vendors of offers "promptly and in writing" and had not told buyers that one property on sale belonged to Lloyds employee David Estall.

The OFT alleged that Lloyds and Mr French had tried to hide what they had done by producing false letters.

Mr Estall was given a warning for failing to pass on offers and not disclosing that he was the owner of the property.

Mike Haley, head of consumer protection at the OFT, said: "Estate agents who have a personal interest in a property that they are marketing must declare this without fail.

"Fabricating letters to the OFT when it is carrying out an enquiry is of the utmost seriousness and we have demonstrated that where necessary we will take the strongest possible action against them," he added.

Agents who do not inform buyers of any personal interest in a property are in violation of the Estate Agents - Undesirable Practices No. 2 Order 1991.