First-tier Tribunal Determines Fair Rent for Property

OUTCOME: Allowed

Case Reference : CAM/00MX/F77/2024/0031

P:PAPERREMOTE

Property : 2 [ADDRESS] [POSTCODE]

Applicant: [redacted]

Respondent: [redacted] : 12 August 2024

Type of Application : Determination of the registered rent under Section 70 Rent Act 1977

Tribunal

: Mrs [NAME] and venue of : 4 November 2024 Hearing remote on the papers after an inspection

_______________________________________________

DECISION ____________________________________

This has been a hearing on the papers which has not been objected to by the parties. A face to face hearing was not held because, no-one requested the same and we determined that the matter could be dealt with on the papers. The documents which we were referred to were in a bundle the contents of which we have recorded. The registered rent with effect from 4 October 2024 is £593.75 per month.

© CROWN COPYRIGHT

FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

Background

1. On 20 March 2024 the landlord applied to the rent officer for registration of a fair rent of £710 per month for the above property.

2. The registered rent at the date of the application was £525 per month which had been registered by the rent officer on 1 April 2020 with effect from 9 May 2020.

3. On 29 July 2024, the rent officer registered a fair rent of £647.87 per month with effect from the same date.

4. The tenant, who has a 25% share in the long leasehold interest in the house, objected to the registered rent on 12 August 2024.

5. The tribunal issued Directions on 11 September 2024. Written representations were received from the tenant, no representations were received from or on behalf of the landlord.

The Inspection

6. The property is a detached house, built in the 1890’s situated very close to a roundabout at the junction of a busy road. The town centre and railway station is approximately 2.5 miles distant. There is a public house immediately to the right of the property and a former primary school used as a children’s nursery to the left. The front garden provides parking for several cars.

7. Internally the house is in good condition, the windows are doble glazed, except for in the entrance porch and the hose is centrally heated via a modern gas fired boiler.

8. The accommodation on the ground floor comprises a porch leading into a small hall/lobby with doors off to the through lounge on the left, which has a flat roof over a rear extension, and the kitchen to the right. A door from the kitchen leads into the utility room with a back door to the garden. The kitchen is situated in a former living room and has been fitted with modern good quality units, tiling and flooring. The utility room is in the area which was originally the kitchen and again has been fitted out by the tenant. The ground floor wc is accessed via the utility room, it was originally accessed from outside. There is no wash basin within the wc compartment.

9. The first floor is approached via a steep staircase with additional stairs to the left and right to provide access to the bedrooms and bathroom. There are three bedrooms and a bathroom on the first floor. The main bedroom is a good size, the second bedroom facing the main road has been reduced in size by the tenant to enable a wash basin to be installed in the bathroom. A cupboard [RESPONDENT] the immersion heater and cold water tank is situated in the third bedroom to the rear of the house.

The Evidence

10. The tenant stated that they had carried out a number of repairs and improvements including a complete overhaul of the flat roof, double glazing, replacement central heating boiler and immersion heater, refurbished the first floor bathroom including installing a wash basin and internalising the ground floor wc, replaced the front and back doors with UPVC double glazed doors: the original doors were wooden.

The Law

11. When determining a fair rent the tribunal, in accordance with section 70 of the Rent Act 1977, must have regard to all the circumstances including the age, location and state of repair of the property. It also must disregard the effect of any relevant tenant’s improvements and the effect of any disrepair or any other defect attributable to the tenant or any predecessor in title under the regulated tenancy, on the rental value of the property. The Tribunal is unable to take into account the tenant’s personal circumstances when assessing the fair rent.

12. In [COMPANY] v Chairman of the Greater Manchester etc Committee (1995) 28 HLR 107 and [NAME] v [NAME] (1999) QB 92 the Court of appeal emphasised:

That ordinarily a fair rent is the market rent for the property discounted for scarcity i.e. 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 to that of a regulated tenancy, and

That for the purposes of determining the market rent, assured tenancy market rents are usually appropriate comparables; adjusted as necessary to reflect any relevant differences between the comparables and the subject property.

Valuation 13. In the first instance I determined what rent the landlord could reasonably be expected to obtain for the property in the open market if it were let today in the condition and on the terms considered usual for such an open market letting. As neither party had provided any market evidence, I relied on my own general knowledge of rents within High Wycombe and concluded that if the house were in the condition usually found on the open market it would let for £1600 per month to take reflect its position on a busy main road location, adjacent to a public house.

14. However, it was first necessary to adjust the hypothetical rent of £1600 per month to allow for the differences between the terms and condition considered usual for such a letting and the condition of the actual property at the valuation date, ignoring any tenant’s improvements, (disregarding the effect of any disrepair or other defect attributable to the tenant or any predecessor in title). I determined that the

hypothetical rent should be reduced by £500 to reflect the physical condition of the property, the lack of double glazing and modernisation, no wash basin within the house, an external wc, carpets, curtains and white goods and difference in terms and conditions.

15. This leaves an adjusted market rent for the subject property of £1100 per month. I am of the opinion that there is substantial scarcity for similar properties in Buckinghamshire and neighbouring counties within the commuter belt for London and therefore made a deduction of 15% for scarcity. The uncapped fair rent is £935 per month which must be adjusted as the tenant under the shared ownership agreement is responsible for all repairs. I have deducted £155 per month to reflect this responsibility, after deducting a further £35 for management and insurance fees I determined the Gross rent at £745 per month. After deducting the tenant’s 25% share and adding back the management and insurance fees the fair rent to be registered is £593.75 per month

Decision

16. The uncapped fair rent initially determined for the purposes of section 70, is below the maximum fair rent of £723.50 per month calculated under the Rent Acts (Maximum Fair Rent) Order 1999. Therefore, the rent will not be capped under the provisions of the Order.

17. Accordingly, the sum of £593.75 per month will be registered as the fair rent with effect from 4 November 2024 being the date of my decision.

Chairman: [NAME]: 4 November 2024

ANNEX - 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 application for permission must be made to the First-tier Tribunal at the Regional Office which has been dealing with the case. The application should be made on Form RP PTA available at https://www.gov.uk/government/publications/form-rp- pta-application-for-permission-to-appeal-a-decision-to-the-upper-tribunal-lands- chamber The application for permission to appeal must arrive at the Regional Office within 28 days after the Tribunal sends written reasons for the decision to the person making the application. If the application is not made within the 28-day time limit, such application 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 application for permission to appeal to proceed, despite not being within the time limit. The application 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 making the application 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 [RESPONDENT] 1988 or the Local Government and [RESPONDENT] 1989, this can only be on a point of law. If the First-tier Tribunal refuses to grant permission to appeal, a further application for permission may be made to the Upper Tribunal (Lands Chamber).

FR27 First-tier Tribunal – Property Chamber File Ref No. CAM/00MX/F77/2024/0031

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were 2 [ADDRESS] [POSTCODE]

[NAME]

Landlord [RESPONDENT]

Tenant [APPELLANT] and Mrs L [APPELLANT]

1. The fair rent is £593.75 Per month (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 4 November 2024

3. The amount for services is

Per

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

Built c 1890, ground floor 1 room, kitchen, utility room and wc.

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 £723.50 per month prescribed by the Order.

Chairman E [NAME] of decision 4 November 2024

FR27 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 388.6

PREVIOUS RPI FIGURE Y 292.6

X 388.6 Minus Y 292.6 = (A) 96

(A) 96 Divided by Y 292.6 = (B) 0.32809

First application for re-registration since 1 February 1999 NO

If yes (B) plus 1.075 = (C)

If no (B) plus 1.05 = (C) 1.37809

Last registered rent* £525 Multiplied by (C) = £723.49 *(exclusive of any variable service charge)

Rounded up to nearest 50p = £723.50

Variable service charge NO If YES add amount for services

MAXIMUM FAIR RENT = £723.50 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.