The criminalisation of sex workers in England and Wales should come to an end, a cross-party committee of influential MPs has recommended.

In an interim report published on Friday, the home affairs select committee, which launched an inquiry into prostitution earlier this year, said the Home Office should immediately change existing legislation so that soliciting is no longer an offence and brothel-keeping laws allow sex workers to share premises. While prostitution is in itself legal in the UK, such related activities currently are not.

The committee also said the Home Office should legislate to delete previous convictions and cautions for prostitution from the record of sex workers, to make it easier for them to move into other forms of work should they wish to do so.

It added, however, that those who use brothels to control or exploit sex workers should continue to be prosecuted. With regards to changing the laws on buying sex, the inquiry will continue, and the committee will seek further evidence on the impacts of recently introduced laws in Northern Ireland and France, as well the model of regulation used in New Zealand.

In a statement, Keith Vaz, chair of the committee, said this was the first time that parliament had considered the issue of prostitution in the round for decades. “It is a polarising subject with strong views on all sides. This interim report will be followed by final recommendations, when we consider other options, including the different approaches adopted by other countries,” he said.

“As a first step, there has been universal agreement that elements of the present law are unsatisfactory. Treating soliciting as a criminal offence is having an adverse effect, and it is wrong that sex workers, who are predominantly women, should be penalised and stigmatised in this way. The criminalisation of sex workers should therefore end.

“The current law on brothel-keeping also means sex workers can be too afraid of prosecution to work together at the same premises, which can often compromise their safety. There must however be zero tolerance of the organised criminal exploitation of sex workers, and changes to legislation should not lessen the Home Office’s ability to prosecute those engaged in exploitation.

“The committee will evaluate a number of the alternative models as this inquiry continues, including the sex-buyers law as operated in Sweden, the full decriminalised model used in Denmark, and the legalised model used in Germany and the Netherlands.”

The English Collective of Prostitutes, which has been campaigning for the decriminalisation of prostitution and for sex workers’ rights and safety, welcomed the committee’s report. A spokeswoman said: “We’re absolutely delighted. The measures will make a massive difference to women in our group who at the moment are living with a massive burden of criminality which really makes it much more dangerous to work.

“The fundamental problem is criminalisation prevents women working together, forces them into isolation and pushes prostitution into the shadows. Thousands of women a year go through the whole criminal justice system, being raided, arrested, prosecuted, ending up with criminal records and in some cases actually in prison.

“We’re glad also that the committee are looking at the question of full decriminalisation as it’s practised in New Zealand. That’s where decriminalisation has concretely been introduced and it’s had fantastic success.”

The collective added that there should be an immediate moratorium on arrests, raids and prosecutions in light of the report, and that civil orders against street based sex workers such as section 35 dispersal orders must also be abolished. “The Home Office should withdraw from cases we are fighting where Romanian sex workers are facing deportation on grounds that sex work is not a ‘legitimate form of work’,” it said.

There are estimated to be about 72,800 sex workers in the UK – 32,000 of whom are in London – and about 11% of British men aged 16-74 have paid for sex on at least one occasion. Sex workers have an average of 25 clients per week paying an average of £78 per visit. In 2014-15, there were 456 prosecutions of sex workers for loitering and soliciting.

Also in 2014, there were 1,139 victims of trafficking for sexual exploitation, and 248 in April to June 2015, following implementation of the Modern Slavery Act 2015. An estimated 152 sex workers were murdered between 1990 and 2015, and 49% of sex workers in a survey said they were worried about their safety.

The committee said it was dismayed at the poor quality of data available regarding the extent and nature of prostitution in England and Wales, and any figures cited must be taken in this context. It said without sufficient evidence the government could not make informed decisions about the effectiveness of current legislation and policies, and that the Home Office should commission an in-depth study on the current extent and nature of prostitution in England and Wales in the next year.

In May, Brooke Magnanti, the former London call girl better known by her alias Belle de Jour, told the committee that criminalisation of payment for sex would dissuade sex workers from reporting violence against them.