A local authority in London has awarded top marks to a letting agent which was the first in the area to scrap tenant fees in a pioneering new scheme.

Newham Council gave McDowalls a full five star rating - the only letting agent to get the accolade out of the 159 agents that were audited over two years in the Fair Lettings Project.

Agents were rated out of five stars with the council recommending tenants use those with a rating of three or more.

Out of 159 agents, 42 gained four stars; 82 achieved three stars, eight got two stars and 17 just one, while nine are still awaiting ratings.

Agents were marked down for failing to refund deposits, charging unjustified and astronomical fees or failing to respond to complaints.

Performance, compliance with the law, delivery of best practice, and customer feedback were also considered.

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 landlords greater confidence in using lettings agents, but the Government must act urgently and follow our lead.”

Firms can appeal the ratings six weeks after they first come out for a fee of £130, 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 and the ratings will be reviewed annually.

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.”