A pioneering scheme: Newham council reveals results of first ever letting agent rating scheme in bid to protect local renters

As more Londoners turn to renting, a new scheme in Newham to identify good and bad agents is sure to be rolled out across the capital.
Making the grade: a new star rating for letting agents is set to help renters
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Ruth Bloomfield25 October 2017

Rogue firms that have failed to refund deposits to tenants or pass on rental income to landlords, as well as those that charge “unjustified” lettings fees or fail to deal properly with complaints, will find they get disappointing grades.

Newham council has carried out a detailed audit of every lettings agent in the borough in the past two years, to identify those that are safe to use — and those with a poor history.

By 2026, an estimated six in 10 Londoners will be renting and if Newham’s scheme succeeds, it is sure to be rolled out across other parts of the capital.

“The chronic shortage of homes is pushing rising numbers of people into expensive, unstable private renting,” said John Bibby, senior policy officer at Shelter.

“Both renters and landlords could benefit from more information on who they can trust. Newham’s rating system will provide landlords with credible, independent reviews to help them pick a decent letting agency to market or manage their property, which should have a positive knock-on effect for tenants. If this works, it will help to make the case for the wider reform of private renting.”

The first agent to achieve a five-star rating is McDowalls Surveyors in East Ham. The firm, founded in 1880, won the accolade after deciding to stop charging tenants fees.

However, more than one in 10 agents in Newham received just a single star — a rating indicating “compliance failures” or cautions for breaches in the law over the past two years. They include Foxtons in Stratford, which was fined £2,500 after failing to clearly explain its fees to prospective tenants.

In 2013 Newham became the first council in the country to introduce mandatory licensing for landlords. Licensing has resulted in more than 1,200 prosecutions in London.

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.”

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