Newham Council in London has become the first local authority in the UK to publish a ratings scheme for every letting agents in the borough.
It is another first for the left wing authority which introduced borough-wide landlord licensing in 2013.
The London borough has conducted an audit of every letting agent in the area over two years to rate firms, known as the Fair Lettings Project, based on those that have in the past failed to refund deposits, pass on rental income, charged unjustified and astronomical fees or failed to address complaints.
The audit also considered performance, compliance with the law, delivery of best practice, and customer feedback.
Agents are rated out of five stars with the council recommending tenants use those with a rating of three or more.
Out of 159 agents, 125 met this recommendation, while 25 didn’t.
Overall, 82 achieved three stars, eight got two stars and 17 just one, while nine are still awaiting ratings.
Only one agent has been awarded the full five-star rating. This went to McDowalls, the first in the area to scrap tenant fees.
Firms can appeal the ratings six weeks after they first come out.
There is a fee of £130 to do this and the re-review will be delivered in 28 days.
All agents were given the chance the appeal their rating before the scheme went live on Monday this week.
The ratings will be reviewed annually.
Sir Robin Wales, Mayor of Newham, said: “We are stepping in to help protect residents from businesses and individuals who exploit extreme demand in the property market to rip off and overcharge.
“Alongside our private rented sector licensing scheme, this initiative aims to drive up the quality of homes for rent in the borough, and increase the professionalism of those who work in the industry. We have also seen great results with the level of non-compliant businesses falling dramatically.
“Our star rating system will give tenants and landlord’s greater confidence in using lettings agents, but the Government must act urgently and follow our lead.
“Councils must be given the power to demand mandatory registration in order to properly regulate the market.”
Chris Baker, of McDowalls Surveyors, which is a member of professional body RICS, added: “I’m proud to be the first agent in Newham to achieve a five star rating – and I’d encourage the Government to make good its promise to make all agents drop fees for tenants, so we are all on a level playing field.
“The best agents have to work hard, making sure everything is done properly for clients. We have to make sure contracts are drawn up properly, that credit checks are sound, and that the properties are safe. But some agents don’t and that makes life harder for others, because clearly less professional agents can do the job on the cheap.”
View the ratings:
Not to be negative but looking at the bigger picture, With five available lettings properties and nine for sale one might say that they are an estate agency not a letting agency? They are probably able to scrap tenant fees because they’re subsidised by the sales that they make and lettings is a sideline because they don’t appear to be members of ARLA or NALs? Any client money protection in place?
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Just to clarify for sake of the previous comment. McDowalls is regulated by RICS and is a member of its Client Money Protection Scheme. We have operated in Newham since 1880 being one of the oldest firms in the borough. My decision not to charge tenant fees is based on it being the right way of conducting a letting business being fair and transparent to both tenants and my clients.
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That’s a tad pretentious isn’t it? I agree with the fair/transparency bit but you can still be fair and transparent and charge tenants fees.
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Do you display your landlord fees? I could not see them on your web site?
level playing field for regulations and compliance is one thing – telling a buisness what it can and cant charge is another and is the main point to pick with your comment about wanting the govt to ban all fees to tenants. Whats your thoughts on rent caps as well?
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As you say it looks like they don’t display the fees they charge Landlords which has been the law since May 2015
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Ironic that Newham have lauded an agent for scraping fee’s but then charge a fee if you wish to challenge the rating they give !!!!!!
surely they receive council tax, business rates and government money to run their council, so they are skimming extra from the businesses in their area, lets launch a campaign to band council fees.
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very well said
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So the council make a licencing scheme for landlords – charge for it.
Then use the money to employ someone to do ratings on each agent. Ultimately giving some agents more business, whilst smearing others.
Looks like you have better be involved in the old boys network and a member of the masons in Newham …….
They only have one very critical review on Allagents , and only 4 on Google.
I think they may be a firm of building surveyors, with agency as a sideline ? And that’s with 2 mins research, wondering how the council rated them. How much do you charge ? Oh, your the cheapest ….. you win !
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A ratings system for said council’s performance seems appropriate.
When is that being introduced?
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I think credit to Newham for taking some initiative- one very big name in the 1 star section! Ouch! Like any award or assessment it will have its pros & cons.
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