First-tier Tribunal Adjusts Fair Rent Based on Property Condition and Market Comparables

OUTCOME: Allowed

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Case Reference

: LON/00AJ/F77/2024/0266

Property : 7 [ADDRESS] [POSTCODE]

Tenant

: Mr [APPELLANT] & Mrs [APPELLANT]

Landlord : [COMPANY] of Objection : 14 July 2024

Type of Application : Section 70, Rent Act 1977

Tribunal

: Mr [NAME] of determination : 11 February 2025

Date of Summary Reasons

: 11 February 2025

_______________________________________________

DECISION

The sum of £239.20 per week will be registered as the fair rent with effect from 11 February 2025 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 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.

Evidence

2. The Tribunal has consideration of the Rent Officers calculations. The Tenant and the Landlord did not produce and written submissions and neither party provided the Tribunal with any comparable evidence.

Determination and Valuation

4. Having consideration of our own expert, general knowledge of rental values in the Southhall area, The Tribunal considers that an achievable rent for a similar four-bedroom terrace house in a good marketable condition with reasonably modern kitchen and bathroom fittings, modern services with carpets curtains and white goods provided by the Landlord would be £460 per week. (Approximately £20000 per month)

5. From this level of rent we have made adjustments in relation to: no white goods, no carpets or curtains, evidence of damp and mould to the main walls, dated kitchen and sanitary fittings and the tenant’s terms of the tenancy which equates to approximately 35%

6. The Tribunal has made an adjustment of 20% for scarcity as it considers there is a restricted supply of similar rental properties in the general area.

7. The calculations for the valuation is shown below:

Market Rent £460.00 pw

Less

approx. 35%

£161.00 Terms and condition

Leaves

£299.00

Less Scarcity 20% £59.80

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8. The Tribunal determines a rent of £239.20 per calendar week.

Decision

9. The uncapped fair rent initially determined by the Tribunal, for the purposes of section 70, was £239.20 per week. The capped rent for the property according to the provisions of the Rent Acts (Maximum Fair Rent) Order 1999 is calculated at £297.50 per calendar week. The calculation of the capped rent is shown on the decision form. In this case, the lower rent of £239.20 per calendar week is to be registered as the fair rent for this property to take effect from the 11 January 2025 being the date the Tribunal made the Decision.

Chairman: [NAME]: 11 February 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 subsequent application for permission to appeal should be made on Form RP PTA

FR27 First-tier Tribunal – Property Chamber File Ref No. GB/LON/00AJ/F77/2024/0266

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were 7 [ADDRESS], [POSTCODE]

Mr [APPELLANT]

Landlord [COMPANY]

Tenant Mr [APPELLANT] & Mrs [APPELLANT]

1. The fair rent is 239.20 Per Week (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 11 February 2025

3. The amount for services is 5.50 Per Week

negligible/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 below the maximum fair rent of £297.50 per week

[NAME] of decision 11 February 2025

FR27 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 392.1

PREVIOUS RPI FIGURE Y 256.7

X 392.1 Minus Y 256.7 = (A) 135.4

(A) 135.4 Divided by Y 256.7 = (B) 0.53

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) 1.58

Last registered rent* 188 Multiplied by (C) = 297.04 *(exclusive of any variable service charge)

Rounded up to nearest 50p = 295.50

Variable service charge NO If YES add amount for services

MAXIMUM FAIR RENT = £297.50 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.