Rating Scheme for Letting Agents Introduced by Newham Council

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Newham Council has introduced the UK’s first agent rating scheme, used to protect landlords and tenants from rogue letting agents.

Plans for the system have been approved by the local authority, and will see all of the borough’s letting agents rated from zero to five stars. Five will be the best rating, and one the worst. The list will be fully disclosed on the council’s website.

The aim behind the scheme is to produce a list that will provide landlords and tenants with all the necessary information to pick an agent for their property investments. It will inform the interested parties about which agents have failed to refund deposits in the past, or failed to pass on rental income. Other information included will be how quickly the agent has responded to complaints in the past and whether they charge unjustifiable to extremely high fees.

The ratings issued to each agent will be based on the result of Newham’s Fair Lettings Project, which has seen all letting agents in the borough audited by the local council. The audit looks at performance and compliance with the law, as well as delivery of best practice and customer feedback. Each agency is then issued with a start rating. Once this rating is decided, the letting agent is informed and then given 21 days within which they can appeal if they feel that the information upon which the rating was decided was incorrect or out of date. Once the appeal period is over, a table will be released of all letting agents and their star rating will be fully published on the council’s website.

The council claims that the rating scheme has encouraged agents to improve their service. 109 businesses, equating to 71 per cent, are three stars and above. However, 29 per cent, or 43 businesses, fall below three starts and remain uncompliant.

A council spokesperson said: ‘The extreme demand in the private rented property sector is being exploited by some unscrupulous letting agents, who rip off landlords and tenants. The law gives us limited powers to act against these cowboys, but by scrutinising their activity, and sharing information with our residents and landlords, the ratings should see the unscrupulous agents pushed out of business.’

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