First-tier Tribunal Adjusts Fair Rent for Tenant Improvements

OUTCOME: Allowed

© CROWN COPYRIGHT

Case Reference

: BIR/OOCT/F77/2025/0001

Property : [ADDRESS] Birmingham

Tenant

: [NAME] [APPELLANT]

Landlord : [NAME] of Objection : 10th January 2025

Type of Application : Section 70 Rent Act 1977

Tribunal Members : Mr [NAME] Mrs [NAME] of Decision : 2nd July 2025

_______________________________________________

DECISION

The sum of £732.00 per month will be registered as the fair rent with effect from 2nd July 2025 being the date the Tribunal made the Decision. ____________________________________

FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

2 REASONS FOR THE DECISION

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 and having regard to its own knowledge, expertise and online research.

Evidence

3. The Tribunal has considered the written submissions provided by the Tenant and the Landlord. From the information provided it appears that the subject property is a semi- detached house comprising one living room and kitchen on the ground floor. On the first floor the landing leads to three bedrooms and bathroom with WC. Outside is a garden with stores, WC and car parking space.

4. The Tenants submit that they have carried out substantial improvement works to the property including extending and refitting the kitchen, refitting the bathroom, fitting a new UPVC double glazed patio door and window, fitting new internal doors, fitting loft and cavity wall insulation, fitting new soffits, gutters and downpipes, providing new fencing and a new gate, fitting full central heating, installing an alarm system and a new gas fire with hearth. In respect of the property condition the roof requires overhauling and the driveway is uneven.

5. The Landlord submits that they installed a new boiler in 2023 which they maintain. The Landlord also submitted various comparable properties with market rents between £1,300.00-£1,450.00 per calendar month.

Determination and Valuation

7. On consideration of the comparable evidence proved by the parties, that forwarded by the Rent Officer and the Tribunal’s own expert knowledge of rental values in the area, the Tribunal considers that the open market rent for the property in a satisfactory condition would be in the region of £1,400.00 per month. From this level of rent, the Tribunal has made adjustments in relation to the following:

a) Condition b) Improvements made by the Tenant c) Curtains, carpets and white goods fitted by the Tenant. d) The Tenant’s liability to redecorate.

3 8. The Tribunal has also made an adjustment for scarcity using their own general

knowledge and experience. The Tribunal considers that in the wider geographical

area there is an imbalance of supply and demand impacting on rental values and has, therefore, made a reduction of 20% for scarcity.

9. The full valuation is shown below:

Market Rent

£1,400.00 per month

Less a) Items given under a) above

£10.00

b) Items given under b) above

£340.00 c) Items given under c) above

£65.00

d) Tenant’s internal decoration liability @ 5% £70.00

Less Scarcity @ 20%

£183.00

£668.00 £668.00

Say

£732.00

10. The Tribunal determines an uncapped rent of 732.00 month.

Decision

11. The uncapped fair rent determined by the Tribunal, for the purposes of section 70, is therefore £732.00 per month from 2nd July 2025. The maximum fair rent permitted by the Rent Acts (Maximum Fair Rent) Order 1999 is £771.50 per month. This therefore has no impact on the rent determined by the Tribunal. The calculation of the capped rent is shown on the decision form.

Chairman: [NAME]: 2nd July 2025

APPEAL PROVISIONS

If either party is dissatisfied with this decision, they may apply for permission to appeal to the Upper Tribunal (Lands Chamber) on any point of law arising from this Decision. Prior to making such an appeal, an application must be made, in writing, to this Tribunal for permission to appeal. Any such application must be made within 28 days of the issue of this statement of reasons (regulation 52 (2) of The Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013) stating the grounds upon which it is intended to rely in the appeal.

4 First-tier Tribunal – Property Chamber File Ref No.

BIR/

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

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

[NAME] Mrs [APPELLANT]

Landlord [APPELLANT]

Tenant [NAME] [APPELLANT]

1. The fair rent is £732.00 Per Month (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 2nd July 2025

3. The amount for services is Nil Per -

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

Nil Per -

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:

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 £771.50 permitted by the Order.

[NAME] of decision 2nd July 2025

5 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 402.9

PREVIOUS RPI FIGURE Y 360.3

X 402.9 Minus Y 360.3 = (A) 42.6

(A) 42.6 Divided by Y 360.3 = (B) 0.1182

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) 1.1682

Last registered rent* 660.00 Multiplied by (C) = 771.01 *(exclusive of any variable service charge)

Rounded up to nearest 50p = £771.50

Variable service charge NO If YES add amount for services

MAXIMUM FAIR RENT = £771.50 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.