First-tier Tribunal Determines Fair Rent for Property

OUTCOME: Allowed

FR24 First-tier Tribunal – Property Chamber File Ref No. LON/00BK/F77/2025/0189

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

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

[NAME]

Landlord [APPELLANT]

Tenant Mr [APPELLANT]. Rahman

1. The fair rent is £1328.55 Per Calendar month (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 27 August 2025

3. The amount for services is £132.55 Per Calendar month

negligible/not applicable

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

nil Per

negligible/not applicable 5. The rent is to be registered as variable.

6. The capping provisions of the Rent Acts (Maximum Fair Rent) Order 1999 apply.

7. Details (other than rent) where different from Rent Register entry

As register entry

8. For information only:

The fair rent to be registered is the maximum fair rent as prescribed by the Rent Acts (Maximum Fair Rent) Order 1999. The MFR applies and the fair rent is capped. The uncapped Fair Rent without the MFR capping provisions, would have been £1500 per calendar month.

[NAME] of decision 27 August 2025

FR24 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE (2 months prior) X 404.50

PREVIOUS RPI FIGURE (2 months prior) Y 358.30

X 404.50 Minus Y 358.30 = (A) 46.2

(A) 46.2 Divided by Y 358.30 = (B) 0.1289

First application for re-registration since 1 February 1999 NO

If yes (B) plus 1.075 = (C)

If no (B) plus 1.05 = (C) 1.1789

Last registered rent* £1014.29 (ex£110.71sc) Multiplied by (C) = £1195.75 pcm *(exclusive of any variable service charge)

Rounded up to nearest 50p = £1196 pcm

Variable service charge Yes If YES add amount for services £132.55

MAXIMUM FAIR RENT = £1328.55 Per Calendar 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.

© CROWN COPYRIGHT 2013

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case Reference : LON/00BK/F77/2025/0189 Property : Flat 6, 159 Sutherland Ave. Maida Vale London [POSTCODE] Applicant : [redacted] Representative : None Respondent : [redacted] Representative : None Type of Application : S.70 Rent Act 1977 – Determination of a new fair rent Tribunal Members : Mr [NAME]. [NAME] and venue of Meeting : 27 August 2025 First Tier Tribunal (London) [ADDRESS] [POSTCODE] Date of Decision : 27 August 2025

REASONS FOR DECISION

Background

1 By an application of 17 January 2025 the landlord applied to the Rent Officer for registration of a fair rent. The rent stated as payable at the time of the application was said to be £1125 pcm. This included a variable service charge of £110.71. The landlord sought a new rent of £1600 pcm including a variable service charge of £132.85 pcm.

2 2 With effect from 13 March 2025, the Rent Officer registered a fair rent of £1153.50 pcm with an uncapped fair rent of £1224 pcm both figures including the variable service charge of £132.85 pcm for information. There was an objection to the new fair rent from the landlord. The First Tier Tribunal was notified of this objection and a request for a fresh determination of the rent.

Directions

3 Directions of 1 July 2025 were issued by the Tribunal, for case progression. Neither party requested a hearing.

Representations

4 Standard Reply Forms were issued by the Tribunal prior and both parties invited to complete and return them. The Tribunal received completed forms from each.

Inspection

5 The Tribunal did not inspect the Property. The Tribunal was however able to externally view it from Google Streetview (@ December 2022). The Property appeared to be part of an 1870’s terrace of five level houses each of basement, ground, first, second and third or attic room levels. The Property is on the second floor. Most of the former family homes in the terrace appear to be have been subdivided into self contained flats, including the building at No.159 of which the Property forms part. There is restricted on street parking. The former house within which the flat is located, and the whole terrace are part of a larger Victorian residential housing estate of similar age and condition.

6 Externally the building at no.159, appeared to be in good condition, with fair faced brick finish to the front external walls. There is a double pitched slate finished roof over the building, with dormers serving the top floor accommodation. The Property has bedroom, living room/ kitchen, bathroom/wc all at second floor. There is a shared garden.

7 There appears to be wooden double hung sash single glazed windows and full central heating. The bathroom and kitchen are assumed to be functional but basic. There is little information on landlord carpets and curtains or white goods and some controversy over their condition.

8 The Tribunal is grateful for such representations as were received from the parties.

Law

9 When determining a fair rent the Committee, in accordance with the Rent Act 1977, section 70, had regard to all the circumstances including the age, location and state of repair of the property. It also disregarded

3 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.

10 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 emphasized

(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).

11 Where the condition of a property is poorer than that of comparable properties, so that the rents of those comparables are towards twice that proposed rent for the subject property, it calls into question whether or not those transactions are truly comparable. Would prospective tenants of modernized properties in good order consider taking a tenancy of an un-modernised house in poor repair and with only basic facilities or are they in entirely separate lettings markets? The problem for the Tribunal is that the only evidence of value levels available to us is of modernised properties. We therefore have to use this but make appropriate discounts for the differences, rather than ignore it and determine a rent entirely based on our own knowledge and experience, whenever we can.

12 On the evidence of the comparable lettings and our own general knowledge of market rent levels in and around Maida Vale, Westminster, the Tribunal accepts that the Property would let on normal Assured Shorthold Tenancy (AST) terms, for £2500 pcm. This then, is the appropriate starting point from which to determine the rent of the Property as it falls to be valued.

13 The Tribunal noted the absence of double glazed units to the windows, an assumed functional but basic kitchen and bathroom fittings and older carpets and curtain provision. A deduction for these shortcomings amounts to £625, so that the adjusted market rent is £1875 pcm.

14 The Tribunal also has to consider the element of scarcity and whether demand exceeded supply. The Tribunal found that there was scarcity in the locality of Westminster for this type of property and makes a

4 further deduction of 20% from the adjusted market rent, leaving an uncapped fair rent of £1500 pcm.

15 The fair rent to be registered on this basis alone would be £1500 pcm, but, the new rent is limited by the statutory Maximum Fair Rent Cap calculation. The MFRC limits any increase to the change in RPI (set two months prior at each date), between the date of the last registration of a fair rent and the current, plus 5%. The calculations are shown in the MFR form and this caps the new fair rent at £1328.85 pcm. As the MFR cap is below the uncapped fair rent above, the new fair rent will be capped at £1328.85 pcm. The new fair rent is therefore registered at this figure.

16 The Rent Act makes no allowance for the Tribunal to take account of hardship arising from the new rent payable compared with the existing rent registered. The landlord is entitled but, not compelled, to charge the tenants rent at the registered figure from the effective date below. The landlord may not charge more than the fair rent but may charge less if it wishes to, or is otherwise required to, under other regulations which may limit its increases in rent as a landlord.

[NAME] 27 August 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 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 decision to the person making the application (regulation 52 (2) of The Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rule 2013).

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).