Fair Rent Determination: Applying Statutory Caps

OUTCOME: Allowed

FR27 Tribunal’s Fair Rent Decision

(5.18) (to be completed by the Tribunal and given to the Case Officer)

Case Number: LON/00AW/F77/2024/0602

Address of Premises The Tribunal members were 61A St. [ADDRESS], [POSTCODE]

Tribunal Judge [NAME]

Landlord [COMPANY]

Tenant Mr [APPELLANT]

1. The fair rent is £229.00 Per week (excluding water rates but including any council tax payable by the tenant to the landlord and any amounts in paras 3&4)

2. The effective date is 21 November 2024

3. The amount for services is not applicable

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

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

None.

8. For information only: (complete (a) or (b))

(a) The fair rent to be registered is the maximum fair rent as prescribed by the Rent Acts (Maximum Fair Rent) Order 1999. The rent that would otherwise have been registered was £345 per week.

Signed by Judge Tribunal Judge Mohabir Date of decision 21 November 2024

FR27 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 390.7

PREVIOUS RPI FIGURE Y 257.6

X 390.7 Minus Y 257.6 = (A) 133.1

(A) 133.1 Divided by Y 257.6 = (B) 0.516693

First application for re-registration since 1 February 1999 NO

If yes (B) plus 1.075 = (C)

If no (B) plus 1.05 = (C) 1.566693

Last registered rent* £146.00 Multiplied by (C) = £228.74 *(exclusive of any variable service charge)

Rounded up to nearest 50p = £229.00

Variable service charge NO If YES add amount for services

MAXIMUM FAIR RENT = £229.00 Per Per week

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.

1

Case Reference:

LON/00AW/F77/2024/0602

Property:

61A St. [ADDRESS], [POSTCODE]

Tenant: `

Mr [APPELLANT]

Landlord:

[COMPANY] of Objection:

22 July 2024

Type of Application: Section 70, Rent Act 1977

Tribunal:

Judge I [NAME] of Extended Reasons

: 21 November 2024

_______________________________________________

DECISION

The sum of £229.00 per week will be registered as the fair rent with effect from 21 November 2024 being the date the Tribunal made the Decision. ____________________________________

© CROWN COPYRIGHT EXTENDED REASONS

FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

2 Background 1. Following an objection from the tenant 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 not inspect the property but considered this case on the basis of the documentary evidence only.

Evidence 3. No written submissions were received from either party.

Determination and Valuation 4. Having consideration of our own [NAME], general knowledge of rental values in the area of Kensington and Chelsea, we consider that the open market rent for the property in its current condition would be in the region of £575.00 per week.

5. From this level of rent we have made global adjustments in relation to:

For the absence of double glazing, tenant’s floor coverings, curtains, white goods, the tenant’s internal decoration obligation under the terms of the tenancy and the fact that the property is unfurnished totalling 25%.

7. The Tribunal has also made an adjustment for scarcity.

8. The full valuation is shown below:

per week Market Rent

£575.00

Less

Deductions above

) No double glazing

) Unfurnished

)

25% No white goods

) Tenant’s floor coverings and carpets

)

Adjusted rent, say

£431.00

Less Scarcity

approx. 20%

£86.00

Fair rent

£345.00

9. The Tribunal determines a rent of £345.00 per week.

Decision 8. The rent has been capped under the provisions of the Rent Acts (Maximum Fair Rents) Order 1999 as it is above MFR of £229.00 per week.

Tribunal Judge: Mr I Mohabir

Date: 21 November 2024

3 APPEAL PROVISIONS

These extended reasons are provided to give the parties an indication as to how the Tribunal made its decision. Any application for permission to appeal should be made on Form RP PTA.