First-tier Tribunal Determines Fair Rent for Property

OUTCOME: Allowed

© CROWN COPYRIGHT

Case Reference

: BIR/00CN/F77/2024/0616

Property : 12 North Gate Harborne Birmingham [POSTCODE]

Tenant

: [NAME] [APPELLANT]

Landlord : BPT ([APPELLANT]) [RESPONDENT] agent : [RESPONDENT] of Objection : 13 September 2024

Type of Application : Section 70 Rent Act 1977

Tribunal Members : [NAME] Regional Surveyor

Judge David R Salter

Date of Decision : 7 April 2024

_______________________________________________

DECISION

The sum of £156.00 per week will be registered as the fair rent with effect from 7 April 2025 being the date the Tribunal made the Decision. ____________________________________

FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

2 REASONS FOR THE DECISION

Background

1. The Rent Officer registered a rental of £142.00 per week on 1 August 2024, effective from 2 September 2024. 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 sought to carry out an inspection of the Property. However, the Tenant did not respond to the inspection requests. Accordingly, the Tribunal has 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. No written submissions were provided by the Tenant in response to the Tribunal’s Directions. The Landlord provided submissions which confirmed essential details of the Property as an end terraced house with gas central heating and with the following accommodation:

Ground Floor: One reception room, kitchen-diner; First Floor: Two bedrooms, bathroom; Outside: Gardens, store, lobby, WC.

The Landlord indicated that it was of the opinion that the open market rental value of the Property was approximately £1,250.00 per calendar month i.e. £288.00 per week.

From this starting point, it had allowed the following for Tenant’s Improvements:

Tenant installed bathroom

£10.00 per week Tenant installed kitchen

£10.00 per week Tenant supplied floor coverings and curtains £10.00 per week Tenant supplied appliances/white goods £10.00 per week

Making the above and other unspecified deductions, in total £60.00 per week, left a rental of £228.00 however the Landlord sought a lower rental of £164.37 per week.

Determination and Valuation

4. On consideration of the evidence provided by the parties, 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

3 condition would be in the region of £288.00 per week which agrees with the Landlord’s opinion. From this level of rent, the Tribunal has made adjustments in relation to the following:

a) Tenants Improvements as set out above. b) Curtains, carpets and white goods fitted by the Tenant. c) The Tenant’s liability to redecorate.

5. The Tribunal has also made an adjustment for scarcity using its 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, has made a deduction of 15% for scarcity.

6. The full valuation is shown below:

Per week

Market Rent

£288.00

Less a) Items given under a) above

£20.00

b) Items given under b) above

£20.00 c) Tenant’s internal decoration liability @ 5% £14.40 £54.40

£233.60 Less Scarcity @ 15%

£35.04

£198.56

Say

£200.00

Decision

7. The Fair Rent calculated by the Tribunal is therefore £200.00 per week. However, the maximum fair rent permitted by the Rent Acts (Maximum Fair Rent) Order 1999 is £156.00 per week. This therefore limits the rent determined by the Tribunal. The calculation of the capped rent is shown on the decision form.

8. The Tribunal determines the Fair Rent as £156.00 per week with effect from 7 April 2025.

[NAME]: [NAME]: 7 April 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

4 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.

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

BIR/00CN/F77/2024/0616

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were: 12 North Gate Birmingham [POSTCODE]

[NAME] Judge David R Salter

Landlord BPT ([APPELLANT]) Limited

Tenant [NAME]

1. The fair rent is £156.00 Per week (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 7 April 2025

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

8. For information only:

The fair rent to be registered is the maximum fair as prescribed by the Rent Acts (Maximum Fair Rent) Order 1999. The rent that would have otherwise been registered was £200.00 per week.

[NAME] of decision 7 April 2025

6 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 394.0

PREVIOUS RPI FIGURE Y 347.6

X 394.0 Minus Y 347.6 = (A) 46.4

(A) 46.4 Divided by Y 347.6 = (B) 0.133486766

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) 1.133486766

Last registered rent* £131.50 Multiplied by (C) = £155.63 *(exclusive of any variable service charge)

Rounded up to nearest 50p = £156.00

Variable service charge NO If YES add amount for services

MAXIMUM FAIR RENT = £156.00 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.