First-tier Tribunal Adjusts Fair Rent for Flat in New Cross

OUTCOME: Allowed

1

Case Reference

: LON/00AZ/F77/2024/0638

Property : Flat 25 [NAME], [ADDRESS] [POSTCODE]

Tenant

: Mr & Mrs [APPELLANT]

Landlord : [NAME] [APPELLANT] and Freifeld

Date of Objection : 28 August 2024

Type of Application : Section 70, Rent Act 1977

Tribunal

: Mr [NAME] Mr [NAME] JP

Date of determination : 22 November 2024

Date of Summary Reasons

: 22 November 2024

_______________________________________________

DECISION

The sum of £1276.00 per month will be registered as the fair rent with effect from 22 November 2024 being the date the Tribunal made the Decision. ____________________________________

© CROWN COPYRIGHT 2023

FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

2

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.

Evidence

2. The Tribunal has consideration of the Rent Officers calculations. The Landlord and Tenant both submitted written submissions which have been taken fully into account. The Landlord provided a helpful floor plan together with a comparable for 16 [NAME] at £3,100.

Determination and Valuation

4. Having consideration of our own expert, general knowledge of rental values in the New Cross area, together with the parties submissions. The Tribunal considers that an achievable rent for a similar four-bedroom flat 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 £2,900 per month.

5. From this level of rent we have made adjustments in relation to: no white goods, no carpets or curtains, significant tenants’ improvements, evidence of damp and mould to the main walls, no central heating and the tenant’s terms of the tenancy which equates to approximately 45%

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 £2900 pm

Less

approx. 45%

£1305 Terms and condition

Leaves

£1595

Less Scarcity 20% £319

3

8. The Tribunal determines a rent of £1,276 per calendar month

Decision

9. The uncapped fair rent initially determined by the Tribunal, for the purposes of section 70, was £1,276 per month. The capped rent for the property according to the provisions of the Rent Acts (Maximum Fair Rent) Order 1999 is calculated at £1,355. per calendar month. The calculation of the capped rent is shown on the decision form. In this case, the lower rent of £1,276 per calendar month is to be registered as the fair rent for this property to take effect from the 22 November 2024 being the date the Tribunal made the Decision.

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. LON/00AZ/F77/2024/0638

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were Flat 25 [NAME], [ADDRESS], [POSTCODE]

[NAME] Mr [APPELLANT] JP

Landlord [NAME] and Freifeld

Tenant Mr & Mrs [APPELLANT]

1. The fair rent is 1276.00 Per Month (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 22 November 2024

3. The amount for services is 45.99 Per Month

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 below the maximum fair rent of £1,355 per month

[NAME] of decision 21 November 2024

FR27 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 390.7

PREVIOUS RPI FIGURE Y 345.2

X 390.7 Minus Y 345.2 = (A) 45.5

(A) 45.5 Divided by Y 345.2 = (B) 0,13

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) 1.18

Last registered rent* 1148 Multiplied by (C) = 1354.64 *(exclusive of any variable service charge)

Rounded up to nearest 50p = 1355

Variable service charge NO If YES add amount for services

MAXIMUM FAIR RENT = £1355 Per Month

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.