First-tier Tribunal Determines Fair Rent for Property

OUTCOME: Allowed

FR27 First-tier Tribunal – Property Chamber File Ref No. GB/LON/00AY/F77/2026/0010

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were 6 [ADDRESS], [POSTCODE]

[NAME] Ms [APPELLANT]

Landlord [NAME]

Tenant Ms [APPELLANT]

1. The fair rent is £255.00 Per week (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 16 March 2026

3. The amount for services is N/A Per N/A

not applicable

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

N/A Per N/A

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 £264.00 per week prescribed by the Order.

[NAME] of decision 16 March 2026

FR27 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 406.4

PREVIOUS RPI FIGURE Y 280.7

X 406.4 Minus Y 280.7 = (A) 125.7

(A) 125.7 Divided by Y 280.7 = (B) 0.4478

First [NAME] for re-registration since 1 February 1999 NO

If yes (B) plus 1.075 = (C)

If no (B) plus 1.05 = (C) 1.4978

Last registered rent* 176.00 Multiplied by (C) = 263.61 *(exclusive of any variable service charge)

Rounded up to nearest 50p = £264.00

Variable service charge NO If YES add amount for services N/A

MAXIMUM FAIR RENT = £264.00 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 [NAME] was the first since 1 February 1999) or 5% (if it is a second or subsequent [NAME] 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 [NAME] of the formula is ascertained the service charge is then added to that sum in order to produce the maximum fair rent.

1

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : GB/LON/00AY/F77/2026/0010 Property : 6 [ADDRESS], [POSTCODE] Tenant : Ms [APPELLANT] Landlord : [NAME] of [NAME] : 20 November 2025 Type of [NAME] : Determination of the registered rent under Section 70 Rent Act 1977

Tribunal member(s) :

[NAME] [NAME]

:

Remote Date of decision : 16 March 2026

REASONS FOR DECISION

© CROWN COPYRIGHT 2026

Background 1. The Landlord applied to the Rent Officer for the registration of a fair rent for the property in an [NAME] dated 11 September 2025.

2. A fair rent of £257.19 per week was registered on 7 November 2025 following the [NAME], such rent to have effect from 7 November 2025. The Tenant subsequently challenged the registered rent on 20 November 2025 and the Rent Officer has referred the matter to the Tribunal for determination.

3. Directions were issued by the Tribunal on 20 January 2026.

4. The parties were invited to submit completed reply forms and any other relevant information by the specified deadlines.

5. Neither the Landlord or Tenant submitted completed reply forms.

6. In their email to the Rent Office dated 20 November 2025, the Tenant set out their grounds for objection to the rent increase as follows:

1. Disproportionate Increase: The proposed rent is £454.49 per month higher than my current rent. Such an extreme rise is not reflective of typical market rates or fair rent principles.

2. Property Condition: The property suffers from damp, outdated fixtures (Same kitchen and dilapidated bathroom since we moved in 30 years ago) rusted radiators throughout, anti-social behaviour issues from neighbours and therefore does not justify a rent level at or near the top of the local market.

3. Local Social housing Comparisons: Comparable properties in the area are not being registered at the level proposed, indicating the calculation may not accurately reflect local social housing rental values.

4. Affordability and Fair Rent Principles: Under the Rent Act, registered rents must be fair, not excessive, and must disregard scarcity. The proposed figure does not appear to meet these criteria. Inspection

7. The Tribunal did not inspect the property but considered this case on the basis of the papers provided by the parties.

The Law 8. When determining a fair rent the Tribunal, in accordance with the Rent Act 1977, section 70, “the Act”, had regard to all the circumstances (other than personal circumstances) including the age, location and state of repair of the property. It also disregarded the effect of (a) any relevant tenant's improvements and (b) the effect of any disrepair or other defect attributable to the tenant or any predecessor in title under the regulated tenancy, on the rental value of the property.

9. In [COMPANY] v Chairman of the Greater Manchester etc. Committee (1995) and [NAME] v [NAME] [1999] the Court of Appeal emphasised that

ordinarily a fair rent is the market rent for the property discounted for 'scarcity'. This is that element, if any, of the market rent, that is attributable to there being a significant shortage of similar properties in the wider locality available for letting on similar terms.

10. The Tribunal is aware that [NAME] v [NAME] (1999) QB.92 is a relevant authority in registered rent determination. This authority states where good market rental comparable evidence i.e., assured shorthold tenancies is available enabling the identification of a market rent as a starting point it is wrong to rely on registered rents. The decision stated: “If there are market rent comparables from which the fair rent can be derived why bother with fair rent comparables at all”.

11. The market rents charged for assured tenancy lettings often form appropriate comparable transactions from which a scarcity deduction is made.

12. These market rents are also adjusted where appropriate to reflect any relevant differences between those of the subject and comparable rental properties.

13. The Upper Tribunal in Trustees of the Israel Moss Children’s Trust v Bandy [2015] explained the duty of the First Tier Tribunal to present comprehensive and cogent fair rent findings. These directions are applied in this decision.

14. The Rent Acts (Maximum Fair Rent) Order 1999 applies to all dwelling houses where an [NAME] for the registration of a new rent is made after the date of the Order and there is an existing registered rent under part IV of the Act. This article restricts any rental increase to 5% above the previously registered rent plus retail price indexation (RPI) since the last registered rent. The relevant registered rent in this matter was registered on 1 May 2018 at £176.00 per week. The rent registered on 7 November 2025 subject to the present objection and determination by the Tribunal is not relevant to this calculation.

Valuation

15. In the first instance the Tribunal determined what rent the landlord could reasonably be expected to obtain for the subject property in the open market if it were let today in the condition that is considered usual for such an open market letting.

16. The parties did not submit any evidence in relation to rental values in the locality, to the Tribunal.

17. Accordingly, the Tribunal considered the value of the property in light of its local knowledge and experience in combination with the landlord’s submissions.

18. The Tribunal felt that a hypothetical rent of £375 per week – were the property let in the condition and on the terms considered usual for such a letting was appropriate as a starting point.

19. This hypothetical rent is adjusted as necessary to allow for the differences between the terms and conditions considered usual for such a letting and the condition of the actual property at the date of the determination. Any rental benefit derived from Tenant’s improvements is disregarded. It is also necessary to disregard the effect of any disrepair or other defects attributable to the Tenant or any predecessor in title.

20. The responsibility for internal decoration at the property under the tenancy agreement is borne by the tenant. This is a material valuation consideration and the Tribunal made a deduction to reflect this liability. The Tribunal made further deductions from the hypothetical rent to account for the Tenant providing white goods, floor and window coverings and other furnishings at the property, and to account for the dated kitchen and bathroom. In total the Tribunal made deductions of 15%.

21. The provisions of section 70(2) of the Rent Act 1977 in effect require the elimination of what is called “scarcity”. The required assumption is of a neutral market. Where a Tribunal considers that there is, in fact, substantial scarcity, it must make an adjustment to the rent to reflect that circumstance.

22. The Tribunal then considered the decision of the High Court in [COMPANY] v [NAME] [2002] EWHC 835 (Admin) which required it to consider scarcity over a wide area rather than limit it to a particular locality. South West London is considered to be an appropriate area to use as a yardstick for measuring scarcity and it is clear that there is a substantial measure of scarcity in South West London.

23. Assessing a scarcity percentage cannot be a precise arithmetical calculation. It can only be a judgement based on the years of

experience of members of the Tribunal. The Tribunal therefore relied on its own knowledge and experience of the supply and demand for similar properties on the terms of the regulated tenancy (other than as to rent) and in particular to unfulfilled demand for such accommodation. In doing so, the Tribunal found that there was substantial scarcity in the locality and therefore made a further deduction of 20% from the adjusted market rent to reflect this element.

24. The valuation of a fair rent is an exercise that relies upon relevant market rent comparable transactions and property specific adjustments. The fair rents charged for other similar properties in the locality do not form relevant transaction evidence.

25. The result is an adjusted market rent of £255 per week.

Decision 26. The uncapped fair rent initially determined by the Tribunal, for the purposes of section 70, was £255 per week. The capped rent for the property according to the provisions of the Rent Acts (Maximum Fair Rent) Order 1999 is calculated at £264 per week. The calculation of the capped rent is shown on the decision form. In this case the lower rent of £255 per week is to be registered as the fair rent for this property.

27. The statutory formula applied to the previously registered rent is provided at Appendix A.

28. Details of the maximum fair rent calculations are provided in the separate notice of the Tribunal’s decision.

29. Accordingly, the sum that will be registered as a fair rent with effect from 16 March 2026 is £255 per week.

Chairman: [NAME]: 16 March 2026

Appendix A The Rents Act (Maximum Fair Rent) Order 1999 (1) Where this article applies, the amount to be registered as the rent of the dwelling-house under Part IV shall not, subject to paragraph (5), exceed the maximum fair rent calculated in accordance with the formula set out in paragraph (2).

(2) The formula is:

MFR = LR [1 + (x-y) +P]

y

where:

• 'MFR' is the maximum fair rent; • 'LR' is the amount of the existing registered rent to the dwelling- house; • 'x' is the index published in the month immediately preceding the month in which the determination of a fair rent is made under Part IV; • 'y' is the published index for the month in which the rent was last registered under Part IV before the date of the [NAME] for registration of a new rent; and • 'P' is 0.075 for the first [NAME] for rent registration of the dwelling-house after this Order comes into force and 0.05 for every subsequent [NAME].

(3) Where the maximum fair rent calculated in accordance with paragraph (2) is not an integral multiple of 50 pence the maximum fair rent shall be that amount rounded up to the nearest integral multiple of 50 pence.

(4) If (x-y) + P is less than zero the maximum fair rent shall be the y existing registered rent.

Rights of appeal By rule 36(2) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013, the Tribunal is required to notify the parties about any right of appeal they may have. If a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber), then a written [NAME] for permission must be made to the First-tier Tribunal at the Regional Office which has been dealing with the case. The [NAME] should be made on Form RP PTA available at https://www.gov.uk/government/publications/form-rp-pta-[NAME]-for- permission-to-appeal-a-decision-to-the-upper-tribunal-lands-chamber The [NAME] for permission to appeal must arrive at the Regional Office within 28 days after the Tribunal sends written reasons for the decision to the [NAME]. If the [NAME] is not made within the 28-day time limit, such [NAME] must include a request for an extension of time and the reason for not complying with the 28-day time limit; the Tribunal will then look at such reason(s) and decide whether to allow the [NAME] for permission to appeal to proceed, despite not being within the time limit. The [NAME] for permission to appeal must identify the decision of the Tribunal to which it relates (i.e. give the date, the property and the case number), state the grounds of appeal and state the result the party [NAME] the [NAME] is seeking. Please note that if you are seeking permission to appeal against a decision made by the Tribunal under the Rent Act 1977, the Housing Act 1988 or the Local Government and Housing Act 1989, this can only be on a point of law. If the Tribunal refuses to grant permission to appeal, a further [NAME] for permission may be made to the Upper Tribunal (Lands Chamber).