Fair Rent Determination for Property Condition and Scarcity

OUTCOME: Allowed

FR27 First-tier Tribunal – Property Chamber File Ref No. LON/00AT/F77/2024/0256

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were 29 [ADDRESS], [POSTCODE]

Judge [NAME]

Landlord [APPELLANT]

Tenant Mrs [APPELLANT]

1. The fair rent is £245.43 Per week (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 22 October 2024

3. The amount for services is £23.17 Per week

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

Per

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 (please see calculation overleaf) 7. Details (other than rent) where different from Rent Register entry

(e) £23.17 per week and not £91.77 per week as shown on the Rent Register

8. For information only:

The fair rent to be registered is not limited by the Rent Acts (Maximum Fair Rent) Order 1999, because it is below the maximum fair rent o £291.00 per week including £ 23.17 per week for services ( not variable)

Chairman Judge Pittaway Date of decision 22 October 2024

FR27 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 388.6

PREVIOUS RPI FIGURE Y 307.4

X 388.6 Minus Y 307.4 = (A) 81.2

(A) 81.2 Divided by Y 307.4 = (B) 0.26415

First application for re-registration since 1 February 1999 NO

If yes (B) plus 1.075 = (C) N/A

If no (B) plus 1.05 = (C) 1.31415

Last registered rent* 221.15 Multiplied by (C) = 290.62 *(exclusive of any variable service charge)

Rounded up to nearest 50p = 291.00

Variable service charge NO If YES add amount for services

MAXIMUM FAIR RENT = £291 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.

Case Reference

: LON/00AT/FTT/2024/0256

Property : 29 [ADDRESS] [POSTCODE]

Tenant

: Mrs [APPELLANT]

Landlord : [RESPONDENT] of Objection : 11 October 2023 (by Landlord)

Type of Application : Section 70, Rent Act 1977

Tribunal

: Judge [NAME] of Reasons : 22 October 2024

_______________________________________________

DECISION

The sum of £245.43 per week will be registered as the fair rent with effect from 22 October 2024, being the date the Tribunal made the Decision. ____________________________________

© CROWN COPYRIGHT 2023

FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

FULL 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 not inspect the property but considered this case on the basis of the papers provided by the parties.

The property is described as a two-bedroom, self-contained mansion-block apartment on the fourth floor, with separate kitchen, bathroom and living room. There are private communal gardens.

Evidence

3. There were no written submissions from the parties.

Determination and Valuation

4. On the basis of 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 £430 per week.

From this level of rent we have made adjustments to reflect • the tenant’s obligations in relation to repair and decoration, • the apparent lack of provision by the landlord of curtains, carpets and white goods, • the tenant’s statement to the Rent Officer on 6 August 2023 regarding poor condition and deterioration, and • the lack of refurbishment of the property to a modern standard.

We have made an adjustment of 30%.

No adjustment is considered necessary for the replacement of the boiler, as this was a replacement of a previous boiler. This is apparent from the invoice for the new boiler provided by the landlord.

5. The Tribunal has also made an adjustment to the rent, net of service charge, for scarcity. We have adopted a scarcity of 20%, being the rate generally adopted for scarcity in the area of greater London.

6. The full valuation is shown below:

Market Rent

£430 per week

Less The adjustment referred (approx. 30%) £129

Adjusted rent

£301 per week

Adjusted Rent net of service charge

£277.83 per week

Less Scarcity approx. 20% (of the rent less the service charge) £222.26 per week

Add Service charge

£23.17 per week

Fair Rent

£245.43 per week

7. The Tribunal determines a rent of £245.43 per week.

Decision

8. The uncapped fair rent initially determined by the Tribunal, for the purposes of section 70, was £245.43 per week. The capped rent for the property according to the provisions of the Rent Acts (Maximum Fair Rent) Order 1999 is calculated at £291 per week. The calculation of the capped rent is shown on the decision form. In this case the lower rent of £245.43 per calendar week is to be registered as the fair rent or this property.

Chairman: Judge Pittaway Date: 22 October 2024

APPEAL PROVISIONS

If either party wishes to appeal this decision, the application for permission to appeal should be made on Form RP PTA.