First-tier Tribunal Determines Fair Rent for Property

OUTCOME: Allowed

FR27 First-tier Tribunal – Property Chamber File Ref No. LON/00BH/F77/2025/0269

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were 31 [ADDRESS] [POSTCODE]

[NAME] Mr [APPELLANT] JP

Landlord [APPELLANT]

Tenant Mrs [APPELLANT]

1. The fair rent is £121.92 Per Week (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 8 December 2025

3. The amount for services is

Per

None

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

Per

None

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

None

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 £148.00 per week.

(b)

[NAME] [NAME] of decision 8 December 2025

FR27 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 407.4

PREVIOUS RPI FIGURE Y 285.1

X 406.1 Minus Y 285.1 = (A) 122.3

(A) 122.3 Divided by Y 285.1 = (B) 0.43

First application for re-registration since 1 February 1999 - NO

If yes (B) plus 1.075 = (C) N/A

If no (B) plus 1.05 = (C) 1.48

Last registered rent* 100 Multiplied by (C) = 148.00 *(exclusive of any variable service charge)

Rounded up to nearest 50p = 148.00

Variable service charge No If YES add amount for services

MAXIMUM FAIR RENT = 148.00 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 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.

Case Reference

: LON/00BH/F77/2025/0269

Property : 31 [ADDRESS], [POSTCODE]

Tenant

: Mrs [APPELLANT]

Landlord : [APPELLANT] of Objection : 1st August 2025

Type of Application : Section 70, Rent Act 1977

Tribunal

: Mr [NAME] Mr [NAME] JP

Date of Summary Reasons

: 8 December 2025

_______________________________________________

DECISION

The sum of £121.92 per calendar week will be registered as the fair rent with effect from 8 December 2025, being the date the Tribunal made the Decision. ____________________________________

© CROWN COPYRIGHT 2023

FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

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.

Inspection 2. The Tribunal considered the matter on the papers and inspected the property on 8 December 2025 in the presence of the tenant and the landlord.

Evidence 3. The Tribunal received completed reply forms from the parties and the Rent Officers calculations for the current Rent Register effective from 12 August 2025.

Determination and Valuation 4. Having consideration of our own expert, general knowledge of rental values in the Stratford area, we consider that the open market rent for a property located in an established residential area and in reasonable condition with modern kitchen and bathroom fittings and services would be in the region of £508 per calendar week. (£2,300 per calendar month) From this level of rent we have made adjustments in relation to:

5. The location of the property. This flat formal had access via Leytonstone High Road. Access is now set between two car work shops with a wooden gate in the centre. Once you are through the gate there is an uneven path with no lighting and an external metal staircase to the flat. There is also emergency access to this area from the ground retail unit, which is also apparently occupied. This arrangement is extremely poor and would have a significant effect on marketability and ultimate rental value.

6 Next, the terms of the tenancy, no white goods, no carpets or curtains, very dated kitchen and sanitary fittings, no central heating. This equates to approximately 70%

5. The Tribunal has also made an adjustment for scarcity at 20%

6. The full valuation is shown below:

Market Rent

£508 pw

Less

approx. 70% £355.60

Leaves;

£152.40

Less Scarcity approx. 20%

£30.48

Leaves

£121.92

Decision

7. The uncapped fair rent initially determined by the Tribunal, for the purposes of section 70, was £121.92 per calendar week. The capped rent for the property according to the provisions of the Rent Acts (Maximum Fair Rent) Order 1999 is calculated at £148 per calendar week. The calculation of the capped rent is shown on the decision form.

8. In this case therefore the lower rent of £121.92 per calendar week is to be registered as the fair rent or this property.

[NAME]: [NAME]: 8 November 2025

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

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference :

LON/00BH/F77/2025/0269

Property :

31 [ADDRESS], [POSTCODE]

Respondent (Landlord)

: [APPELLANT] : None Applicant (Tenant) : Mrs [COUNSEL] : None Type of application : Section 70 of the Rent Act 1977 Tribunal Members :

Mr [NAME] Mr [NAME] JP

Date of extended Reasons

: 17 December 2025

DECISION

The Tribunal determines £121.92 per calendar week is to be registered as the fair rent for the above property with effect from 8 December 2025, being the date of the Tribunal's decision.

Following receipt of an email dated 15 December 2025 from the landlord, the Tribunal provides the following reasons for the decision dated 8 December 2025

The reasons for this decision are set out below.

Reasons

Background

1. On 16 June 2025 the landlord applied to the Valuation Office Agency (Rent Officer) for registration of a fair rent of £500 per week (£2,166 per calendar month) for the property.

2. The rent payable at the time of the application was £100 per week (£433 per calendar month), effective from 13 March 2019.

3. On 12 August 2025 the Rent Officer registered a fair rent of £110.50 per week, (£476 per calendar month), effective from that date. The rent increase imposed by the Rent Officer had not been “capped” or limited by the operation of the Rent Acts (Maximum Fair Rent) Order 1999 (the Order).

4. By an email dated 29 August 2025 from [RESPONDENT] [NAME], on behalf of the landlord objected to the rent determined by the Rent Officer and the matter was referred to this Tribunal.

The law

5 When determining a fair rent, the Tribunal, in accordance with the Rent Act 1977, section 70, 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 (a) any relevant tenant's improvements and (b) the effect of any disrepair or other defect attributable to the tenant, on the rental value of the property. Section 70(2) of the Rent Act 1977 imposes on the Tribunal an assumption that the number of persons seeking to become tenants of similar dwelling house in the locality on the terms (other than those relating to rent) of the regulated tenancy is not substantially greater than the number of such dwelling houses in the locality which are available for letting on such terms. This is commonly called ‘scarcity’.

[COMPANY] v [NAME] of the Greater Manchester Council (1995) 28 HLR 107 and [NAME] v [NAME] Tribunal [1999] QB 92 the Court of Appeal emphasised

(a) 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 - other than as to rent - to that of the regulated tenancy) and

(b) that for the purposes of determining the market rent, assured tenancy (market) rents are usually appropriate comparables. (These rents may have to be adjusted where necessary to reflect any relevant differences between those comparables and the subject property).

The Rent Acts (Maximum Fair Rent) Order 1999 places a “cap” on the permissible amount of the increase of a fair rent between one registration and the next, by reference to the amount of the increase in the United Kingdom Index of Retail Prices between the dates of the two registrations. Where the cap applies the Rent Officer and the Tribunal is prevented from increasing the amount of the fair rent that it registers beyond the maximum fair rent calculated in accordance with the provisions of the Order and the mathematical formula set out in the Order. By article 2(7) of the 1999 Order the capping provisions do not apply “in respect of a dwelling-house if because of a change in the condition of the dwelling- house or the common parts as a result of repairs or improvements (including the replacement of any fixture or fitting) carried out by the landlord or a [NAME], the rent that is determined in response to an application for registration of a new rent under Part IV exceeds by at least 15% the previous rent registered or confirmed.”

Facts found with Inspection

6. The parties did not request a hearing, and the Tribunal were satisfied this was not required and relied on information provided by the parties and the Rent Officer together with its expert knowledge.

The Inspection

7. The Tribunal inspected the property on 8 December 2025 in the presence of the [NAME].

8. The property forms part of a mid-terrace three-storey Victorian building with brick elevations. The converted flat is located on the first and second floors.

9. The property is located on a mixed commercial and residential road principally comprising vehicle workshops and garages. Originally, access to the flat was obtained via Leytonstone High Street, which has been blocked up. Today, access is set between two car workshops with a wooden gate in the centre. Once you are through the gate, there is an uneven path with no lighting and an external metal staircase to the flat. There is also emergency access to this area from the ground retail unit, which is also apparently occupied. This

arrangement is extremely poor, poses a security hazard and would have a significant effect on marketability and ultimate rental value.

10. The accommodation comprises: living room, kitchen, 3 bedrooms and small bathroom.

11 There is no central heating. Windows are partially double-glazed. The external fabric of the building is in need of refurbishment.

Terms of the tenancy

12 It is understood that this tenancy commenced in 1984, although an agreement was not provided by the parties. It is assumed that the landlord is responsible for structural repairs and external decoration; the tenant is responsible for internal decorations. The property was let unfurnished.

The Tenants Case

13 In her handwritten reply form, the tenant confirms that any improvements have been undertaken by the tenant and her son. Internal walls to the flat are damp in areas, the flooring in the kitchen is uneven due to building works on the ground floor unit. The bathroom wall leaks, and there are severe draughts from the flat below. The kitchen and bathroom fittings have been replaced by the tenant. Overall, the flat’s previous and current landlords have completely neglected the property, and it is in poor condition.

The Landlords case

14. The landlord states that he has requested access from the tenant to inspect the property and undertake refurbishment of the flat, upgrade of services and improvements to the front garden and access arrangements. This request has been denied several times by the tenant. No such written evidence was provided to the Tribunal to confirm this matter.

15. Ultimately, it is always open to the landlord to apply to the Court in order to gain access to the property to perform his duties in accordance with the agreement. Under the Rent Act 1977, a tenant is only required to afford a landlord access and facilities for executing repairs that the landlord is entitled to perform, not for general improvements. A tenant can object to improvements, and if the works are not strictly repairs, the landlord cannot force access.

16. In accordance with the Act, the Tribunal must value the property based upon the condition at the date of valuation, being the date of the decision.

17. The Tribunal has taken into account the evidence provided by the landlord in connection with the payment of water rates for the property.

The Rent Officer Calculations.

17. The Tribunal had copies of the Valuation Office Agency correspondence and including the rent registers effective from 13 March 2019 and 12 August 2025, together with the calculations for the most recent registration.

Valuation

18. In the first instance, the Tribunal 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 that is considered usual for such an open market letting.

19. Based upon its expert knowledge of rental values in the Stratford area, the Tribunal consider that the subject property, if located in an established residential area finished to a reasonable standard with modern services and central heating would be likely to attract a rent let on an assured shorthold tenancy, for £508 per week. (£2,300 per calendar month).

20. Next, we need to adjust that hypothetical rent of £508 per week to allow for the very poor location and access arrangements, the differences between the terms of this tenancy and the lack of white goods, carpets and curtains, tenants internal decoration responsibility, very dated kitchen and bathroom fittings, no central heating, damage to plaster and damp to internal walls.(disregarding the effect of tenant’s improvements and any disrepair or other defect attributable to the tenant).

21. The Tribunal has considered very carefully the submissions and the notes prepared by the Rent Officer.

22. Using our own expertise, we considered that deductions of approximately 70% should applied in order to take into account the terms of the tenancy, and the condition of the property. This provides a deduction of £355.60 per week from the hypothetical rent. This reduces the figure to £152.40 per week.

23. It should be noted that this figure cannot be a simple arithmetical calculation and is not based upon capital costs but is the tribunal’s estimate of the amount by which the rent would need to be reduced to attract a tenant.

Scarcity

24. Thirdly, the tribunal then went on to consider whether a deduction falls to be made to reflect scarcity within the meaning of section 70(2) of the 1977 Act. The tribunal followed the decision of the High Court in [COMPANY] v [NAME], in which it was held that scarcity over a wide area should be considered rather than scarcity in relation to a particular locality.

25. In the Tribunal’s opinion there should be a deduction of 20% for scarcity as it is considered that demand outweighs supply for rented properties in the area.

26. Applying this deduction of £30.48 produces a rental figure of £121.92 per week.

Conclusion

27. The capping provisions of the Rent Acts (Maximum Fair Rent) Order do not apply, and therefore the above figure applies. For information, the capped fair rent in accordance with the attached calculations is £148 per week. For the tenant’s information, this calculated figure is based upon the latest RPI figure and therefore, there has been an increase since the Rent Officers registered rent.

28. Therefore, £121.92 per week is the fair rent to be registered limited by the Rent Acts (Maximum Fair Rent) Order 1999 with effect from 8 December 2025, being the date of the Tribunal’s decision.

29. Detailed calculations were attached to the decision form.

[NAME]

17 December 2025

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 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. If the tribunal refuses to grant permission to appeal, a further application for permission may be made to the Upper Tribunal (Lands Chamber).