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Letting Agents Rating Scheme

Newham Council has developed a rating system for local letting agents to help drive improvements in the Private Rented Sector. This will be the first of this kind in the country and aims to help residents who are renting privately and landlords who have properties to let get a better deal out of the lightly regulated housing market.
 
This forms an important part of Newham’s aim to provide genuine housing options for the community. The letting agents rating scheme seeks to empower private rented sector tenants and landlords to make informed choices when selecting a letting agent.

The aims of the scheme

This scheme, along with a robust enforcement programme, will act as a real deterrent to unscrupulous businesses and promote confidence in the use of independently verified and rated professional letting agents.
 
The Government has recently introduced legislation that applies to letting agents and now requires membership of a redress scheme and transparency about displaying fees. However this does not provide a complete regulatory framework and is not as rigorous as the requirements that apply to estate agents. There is also no requirement to be a member of a professional body.

We are publishing online a zero to five star ratings of the 159 letting agents that are based within Newham that is accessible to the public. 

The main aims of doing this are:
  • To promote choice – the scheme will help tenants and landlords to make more informed choices. We believe that the market is confusing for consumers. Professional bodies and other organisations provide varying degrees of governance, while none of the existing accreditation schemes provide a simple way to separate good letting agents from bad ones.
  • To encourage professionalism in the sector - publishing ratings for all agents in borough recognises good practice and helps drive fair competition by incentivising other agents to improve. A relatively small proportion of properties  in Newham are managed through professional agents or landlords – around 30 per cent, or 15,000 homes.
  • To help prevent residents being exploited - an easy to understand system run by the Council makes it less likely that our residents will become the victims of poor property management, fraud or criminal practices.
 
 

Scope of the scheme

The scheme includes the following elements:
  1. An assessment by the Trading Standards Team to ensure current compliance with the consumer protection legal requirements that apply to letting agents.
  2. A review of recent compliance history with respect to Trading Standards and Housing related legislation.
  3. Professional Body Membership – recognition given to those businesses that have a joined a professional body
  4. Improving Best Practice for tenants – recognition given to those agents that either do not charge tenant fees or provide credit rating data on behalf of tenants.
This consumer and housing compliance information will be supported with a robust regulatory framework making full use of all Newham’s enforcement powers
 
 
 

The ratings explained

The ratings are based on objective data that the Council holds for each letting agent following inspections and validation of their business practises against the current legal requirements for the residential lettings industry. There are checks carried out to assess previous offences committed in respect of housing and trading standards matters.
 
An agent rated above 3 Stars must be a member of a recognised professional body and to be a 5 Star Agent they must not charge fees to tenants or provide tenant credit rating data.
 
The 4 and 5 Star criteria are aimed at driving improvements and best practice with letting agents locally. Recognising agents who are members of a professional body helps drive up standards. Agents will be bound by a code of conduct, will receive regular updates about legislation and with some bodies Continuing Professional Development is mandatory.
 
The 5 Star criteria options are aimed at driving improvements for tenants. By including agents that do not charge tenants fees this precedes the Government announcement to ban tenant fees.

The table provides a checklist of how letting agents have been rated. For a more complete explanation, see the explanation if criteria PDF.

​Star rating
​Description
​0 ​Relevant Criminal Convictions in Last Five Years
​1 Current Consumer Protection or Housing related Compliance Failures or Simple Cautions within the last two years
​2 No Consumer Protection or Housing related Compliance Failures in which a civil Penalty or Financial Penalty has been imposed within the last two years
​3 Fully Compliant Business with no recent criminal convictions, financial or civil penalties for Consumer Protection or Housing related offences or compliance failures
​4 Fully Compliant Business with Membership of a Professional Body 
​5 ​Fully Compliant Business with no Tenant Fees or Provides Credit Rating Service for Tenants
 
 

Current ratings - October 2017

We recommend using letting agents who meet at least the three star rating.
 

Compliant = 125 agents (79%)

Noncompliant = 25 agents (16%) 

Pending = 9 agents (5%)

There are links to individual ratings pages under the 'Star rating' column in the table below

​Star rating Number of agents​ % of total​
​5* ​1
​1%
​4* 42 ​26%
​3* ​82 ​52%
​2* ​8 ​5%
1* 17
​11%
​0* ​0 ​0%
​Pending ​9 ​5%
​Totals ​159 ​100%

 
 

Appeals and re-rating

The scheme includes an appeals process where letting agents can provide evidence to challenge their rating and this rating will be reviewed by a panel of officers.
 
There is also incorporated a re-rating system where agents would be able request that a new rating is carried out and to inform us of any changes in their circumstances which mean their rating should change (e.g. because they have become a member of a professional body). 

There will be a 6 week ‘stand still’ period that would apply to the original rating but following that period a new rating would be published subject to verification and re-inspection. 



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