Fair Rent Calculation for a Property Under the Rent Act 1977

OUTCOME: Allowed

FR27 First-tier Tribunal – Property Chamber File Ref No. LON/00AW/F77/2025/0052

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were [ADDRESS] [POSTCODE]

[NAME] C Piarroux JP

Landlord [APPELLANT] (one) [APPELLANT] and [APPELLANT] (Two) Limited

Tenant [NAME]

1. The fair rent is £26254.00 Per year (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 20 May 2025

3. The amount for services is £2854.19 Per year

negligible/not applicable

4. The amount for fuel charges (excluding heating and lighting of common parts) not counting for rent allowance is

£400.66 Per year

negligible/not applicable

5. The rent is not to be registered as variable.

6. The capping provisions of the Rent Acts (Maximum Fair Rent) Order 1999 apply.

7. Details (other than rent) where different from Rent Register entry

n/a

8. For information only:

(a) The fair rent to be registered is the maximum fair rent as prescribed by the Rent Acts (Maximum Fair Rent) Order 1999 because the rent determined under the market approach greater.

[NAME] of decision 20 May 2025

FR27 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 395.3

PREVIOUS RPI FIGURE Y 340.00

X 395.3 Minus Y 340.00 = (A) 55.3

(A) 55.3 Divided by Y 340.00 = (B) 0.1626

First application for re-registration since 1 February 1999 YES/NO

If yes (B) plus 1.075 = (C)

If no (B) plus 1.05 = (C) 1.2126

Last registered rent* £21650 pa Multiplied by (C) = 26253.80 *(exclusive of any variable service charge)

Rounded up to nearest 50p = 26254.00

Variable service charge no If YES add amount for services no

MAXIMUM FAIR RENT = £26254.00 Per year

Explanatory Note

1. The calculation of the maximum fair rent, in accordance with the formula contained in the Order, is set out above.

2. In summary, the formula provides for the maximum fair rent to be calculated by:

(a) increasing the previous registered rent by the percentage change in the retail price index (the RPI) since the date of that earlier registration and

(b) adding a further 7.5% (if the present application was the first since 1 February 1999) or 5% (if it is a second or subsequent application since that date).

A 7.5% increase is represented, in the calculation set out above, by the addition of 1.075 to (B) and an increase of 5% is represented by the addition of 1.05 to (B).

The result is rounded up to the nearest 50 pence.

3. For the purposes of the calculation the latest RPI figure (x) is that published in the calendar month immediately before the month in which the Tribunal’s fair rent determination was made.

4. The process differs where the tenancy agreement contains a variable service charge and the rent is to be registered as variable under section 71(4) of the Rent Act 1977. In such a case the variable service charge is removed before applying the formula. When the amount determined by the application of the formula is ascertained the service charge is then added to that sum in order to produce the maximum fair rent.

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Case Reference

: LON/00AW/F77/2025/0052

Property : [ADDRESS] [POSTCODE]

Tenant

: [NAME]

Landlord : [APPELLANT] (One) [RESPONDENT] (Two) [COMPANY] of Objection : 21 October 2024

Type of Application : Section 70, Rent Act 1977

Tribunal

: [NAME] C Piarroux JP

Venue : Determination on Papers after an

inspection

Date

: 20 May 2025

_______________________________________________

DECISION

The sum of £26254 per year including service charge of £2854.19 per year, of which £400.66 is attributable to fuel per year will be registered as the fair rent with effect from 20 May 2025 date the Tribunal made the Decision. ____________________________________

© CROWN COPYRIGHT 2025

FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

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Summary REASONS

Background 1. Following an objection from the Landlord to the determination of a fair rent by the Rent Officer, the Tribunal has made a determination under the provisions of the Rent Act 1977.

Inspection 2. The Tribunal did inspect the property. The property comprises a self- contained converted flat, full central heating comprising three rooms, one kitchen, one bathroom/WC and a garden. The front living room has high ceilings; the tenant added a radiator and has also refurbished the flooring. The landlord has capped off the fireplace. The master bedroom had cracks in ceiling and the tenant had extended the existing floor level cupboards to ceiling. The second bedroom, the tenant has added mirrors to door, and there are cracks in ceiling. Within the kitchen, the tenant installed splash back tiles, worktop, new fridge and shelving and washing machine. The kitchen units are original and tired; there are cracks in the ceiling. In the bathroom, the tenant has installed a new wash basin, installed heated towel rail and shower unit. The bath is original as is the toilet. The hall has new central lighting added by the tenant. Overall, the flat has been rewired by the tenant who has been in occupation for around 50 years.

Evidence 3. The Tribunal has had consideration of the written submissions provided by the Tenant and the Landlord.

Determination and Valuation 4. Having consideration of any comparable evidence proved by the parties and our own expert, general knowledge of rental values in the area, we consider that the open market rent for the property in good tenantable condition would be in the region of £5000.00 per calendar month. This level of rent takes into account the presence of communal heating. From this level of rent we have made adjustments in relation to: the improvements and disrepair of the property.

5. The Tribunal has also made an adjustment for scarcity of 20%.

6. The full valuation is shown below:

Market Rent

£5000.00 per calendar month

Less Tenants' responsibility for internal decoration Deduct 5% Tenants' responsibility for white goods, carpets/curtains Deduct 5% Disrepair- cracking-tenants' improvements Deduct 15%

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Deduct £1250 pcm

Subtotal £3750 pcm

Less Scarcity

20% -£750 pcm

Leaves

£3000 pcm

7. The Tribunal determines under section 70, a rent of £3000 per calendar month which is equivalent to £36000 per year inclusive of service charge of £2854.19 per year of which £400.66 pa is attributed to fuel charges.

Decision 8. The uncapped fair rent initially determined by the Tribunal, for the purposes of section 70, was £36000 per year including service charge of £2854.19 per year of which £400.66 per year is attributable to fuel charges. The capped rent for the property according to the provisions of the Rent Acts (Maximum Fair Rent) Order 1999 is calculated at £26254.00 per year including service charge of £2854.19 per year of which £400.66 per year is attributable to fuel charges. The calculation of the capped rent is shown on the decision form. In this case the lower rent of £26254.00 per year is to be registered as the fair rent or this property from 20 May 2025.

Chairman: [NAME]: 20 May 2025

APPEAL PROVISIONS

These summary reasons are provided to give the parties an indication as to how the Tribunal made its decision. If either party wishes to appeal this decision, they should first make a request for full reasons and the details of how to appeal will be set out in the full reasons. Any request for full reasons should be made within a month. Any subsequent application for permission to appeal should be made on Form RP PTA