First-tier Tribunal Adjusts Fair Rent Considering Scarcity

OUTCOME: Allowed

FR24 First-tier Tribunal – Property Chamber File Ref No. GB/LON/00AU/F77/2024/0141

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

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

[NAME]

[COMPANY]

Tenant [APPELLANT]

1. The fair rent is 277.00 Per Week (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 15 July 2024

3. The amount for services is 2.54 Per Week

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

0.00 Per

not applicable

5. The rent is 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 £ 305.04 per week including £ 2.54 per week for services (variable) prescribed by the Order.

Chairman Mr [NAME] [NAME] of decision 15 July 2024

FR24 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 386.4

PREVIOUS RPI FIGURE Y 305.5

X 386.4 Minus Y 305.5 = (A) 80.90

(A) 80.90 Divided by Y 305.5 = (B) 0.2648

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) 1.3148

Last registered rent* 229.71 Multiplied by (C) = 1.3148 *(exclusive of any variable service charge)

Rounded up to nearest 50p = 302.50

Variable service charge YES If YES add amount for services 2.54

MAXIMUM FAIR RENT = £305.04 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.

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Case Reference

: GB/LON/00AU/F77/2024/0141

Property : [ADDRESS], [POSTCODE]

Tenant

: [NAME] [APPELLANT] [NAME]

Landlord : [COMPANY] of Objection : 9 February 2024

Type of Application : Section 70, Rent Act 1977

Tribunal

: Mr [NAME] of Summary Reasons

: 15 July 2024

_______________________________________________

DECISION

The sum of £305.04 per week will be registered as the fair rent with effect from 15 July 2024, being the date the Tribunal made the Decision. ____________________________________

© CROWN COPYRIGHT 2024

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.

Inspection 2. The Tribunal did not inspect the property but considered this case on the basis of the papers provided by the parties and Google Maps.

Evidence 3. The Tribunal has considered the written objection to the Rent Officer by the Tenant. In the Tribunal, there were no written submissions from the parties.

Determination and Valuation 4. Having considered our own expert, general knowledge of rental values in the area, we consider that the open market rent for the property in its current condition would be in the region of £346 per week.

5. The Tribunal has then made an adjustment for scarcity.

6. The full valuation is shown below:

per calendar month/week Market Rent

£346

Less Scarcity

approx. 20%

£69.00

£277.00

7. The Tribunal determines a rent of £277 per week.

Decision 8. The uncapped fair rent initially determined by the Tribunal, for the purposes of section 70, was £277 per week. The capped rent for the property according to the provisions of the Rent Acts (Maximum Fair Rent) Order 1999 is calculated at £305.04 per week. The calculation of the capped rent is shown on the decision form. In this case the lower rent of £277 per week is to be registered as the fair rent or this property.

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The tenant should note that the registered rent is the maximum rent recoverable, and landlords may charge a lower rent.

Chairman: [NAME]: 15 July 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 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