Fair Rent Determination for Property Under Rent Act 1977

OUTCOME: Allowed

FR27 First-tier Tribunal – Property Chamber File Ref No. HS/LON/00AW/F77/2024/0201

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were 112a [ADDRESS], [POSTCODE]

[NAME] Mr [APPELLANT]

Tenant Ms [APPELLANT]

1. The fair rent is 21,840 Per annum (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 20th September 2024

3. The amount for services is

Per

not applicable

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

8. For information only:

(a) The fair rent to be registered is not limited by the Rent Acts (Maximum Fair Rent) Order 1999, because it is the same as/below the maximum fair rent of £28,930 per annum

[NAME] of decision 20th September 2024

FR27 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 389.9

PREVIOUS RPI FIGURE Y 308.6

X 389.9 Minus Y 306.6 = (A) 81.3

(A) 81.3 Divided by Y 306.6 = (B) 0.265

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) 1.315

Last registered rent* 22,000 Multiplied by (C) = 28,930 *(exclusive of any variable service charge)

Rounded up to nearest 50p = 28,930

Variable service charge NO If YES add amount for services

MAXIMUM FAIR RENT = £28,930 Per Annum

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/F77/2024/0201

Property : 112A [ADDRESS] [POSTCODE]

Tenant

: Ms [APPELLANT]

Landlord : [APPELLANT] of Objection : 23rd March 2024

Type of Application : Section 70, Rent Act 1977

Tribunal

: Mr [NAME] Mr [NAME] of Summary Reasons

: 19th September 2024

_______________________________________________

DECISION

The sum of £21,840 per annum will be registered as the fair rent with effect from 19th September 2024 being the date the Tribunal made the Decision. ____________________________________

© CROWN COPYRIGHT 2023 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 inspected the property at around 12 noon in the presence of the tenant. The landlord’s representative was in attendance but did not enter the property. During the inspection the tenant’s brother and daughter explained the condition of the property and confirmed improvements made by the tenant over the course of the tenancy together with a number of associated damp and mould defects.

The Tribunal explained the formula for the calculation of the maximum fair rent. The reason for the increase is that the formula is based upon the Retail Price Index (RPI) which has seen significant growth in the past 18 months due to rampant inflation.

Evidence

3. The Tribunal has consideration of the written submissions from both parties and the inspection of the property. The Landlord provided the Tribunal links with evidence of rental levels for comparable properties in the area.

Determination and Valuation

4. Having consideration of our own expert, general knowledge of rental values in the [ADDRESS] area together with the Landlords comparable evidence, we consider that the open market rent for the property in its current condition would be in the region of £42,000 per annum. (£3,500 per month) From this level of rent we have made adjustments in relation to: the damp and mould to the main walls, no central heating, no white goods, no carpets or curtains, tenants improvements and terms of the tenancy which equates to approximately 35%

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

6. The full valuation is shown below:

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Market Rent £42,000 pa

Less

approx. 35%

£14,700 Terms and condition

Leaves

£27,300

Less Scarcity

approx. 20%

£5,460

Leaves

£21,840 pa

7. The Tribunal determines a rent of £21,840 per calendar annum

Decision

8. The uncapped fair rent initially determined by the Tribunal, for the purposes of section 70, was £21,840 per annum. The capped rent for the property according to the provisions of the Rent Acts (Maximum Fair Rent) Order 1999 is calculated at £28,930 per calendar annum The calculation of the capped rent is shown on the decision form. In this case the lower rent of £21,840 per annum is to be registered as the fair rent for this property effect from 19th September 2024 being the date the Tribunal made the Decision.

Chairman: [NAME]: 19th September 2024

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

4 how to appeal will be set out in the full reasons. Any subsequent application for permission to appeal should be made on Form RP PTA