Council to have star-rating system for all letting agencies in its area

Newham council is to set up the UK’s first letting agents rating scheme to protect residents and landlords from rogue agents.

The authority has approved plans to rate all of the borough’s letting agents from zero to five stars (where five is the best), and then publish the list in full on the council’s website.

The council claims the list will offer potential tenants and landlords with all the information they need to pick the best and most professional agents. They will also know which agents have in the past failed to refund deposits, pass on rental income, charged unjustified and astronomical fees or failed to address complaints.

The ratings are based on the results of Newham’s Fair Lettings Project, which over two years has seen all letting agents in the borough audited by the council. 

The audit considered performance, compliance with the law, delivery of best practice, and customer feedback. It resulted in the award of a star rating for each agency.

The council says the project has forced businesses up their game and 71 per cent, or 109 businesses, are three stars or above - but 29 per cent, or 43 agencies, remain uncompliant and fall below three stars.

Once star ratings are determined each agency is informed of their result and given 21 days to appeal if they think the information is wrong or out of date.

At the end of the appeal period, a table of all letting agents and their star rating will be published in full on the council’s website. 

Residents and landlords will be encouraged to avoid any agents rated below three stars.

“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” says a council spokesman.