First-tier Tribunal Determines Fair Rent for Property

OUTCOME: Dismissed

1

Case Reference

: LON/00BK/F77/2025/0103

Property : 23 [ADDRESS], [POSTCODE]

Tenant

: Mr & Mrs [APPELLANT]

Landlord : [NAME] of Objection : 21 January 2025

Type of Application : Section 70, Rent Act 1977

Tribunal

: Mr [NAME] [NAME] of Reasons

: 20 May 2025

_______________________________________________

DECISION

The sum of £66,000 per year will be registered as the fair rent with effect from 20 May 2025, being the date the Tribunal made the Decision. ____________________________________

© CROWN COPYRIGHT 2023

FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

2

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

Evidence

3. The landlord has provided written submissions noting that the new registered rent by the Rent Officer shows an increase of 0.38% compared with the previous registration. In the period between January 2022 and January 2025 the retail prices index rose by 23%. Savills rental index for houses in the St [NAME] area grew by 18.19% over the same period. [ADDRESS] is that have a floor area of 3552 ft.² and the registered rent represents £15.41 per square foot. The tenant is responsible for all repairs and insurance.

4. The representations include details of four comparable lettings in immediate vicinity.

[ADDRESS] is a house of 4465 ft.² let on 21 May 2024 at a rent of 260,000 per annum. This represents £58.23 per square foot. The terms of the tenancy are not given.

[ADDRESS]8 was let on 16 October 2023 and is described as a large four-storey modernised house. Does a floor area of 2133 ft.² and let at a rent of £135,200 per year which breaks down to £63.38 per square foot. Again the terms of the tenancy are not given.

[ADDRESS]8 was let on 15 January 2023 and has a floor area of 2034 ft.². It is a modernised four-bedroom house let at a rent of £124,800 per annum representing £61.36 per square foot. The terms of the tenancy have not been given.

[ADDRESS] and W8 was let on 29 July 2024 and is modernised four-storey house furnished. It is significantly smaller floor area of 1904 ft.² and was let for a rent of £130,776 per annum. This represents £68.32 per square foot. The terms of the tenancy have not been given.

5. In reply, the tenant stated that it was difficult to understand how an increase could be justified given the long-standing tenancy and unique

3 circumstances surrounding the property. The tenants purchased the lease 34 years ago when it had an unexpired term of 11 years. Since then they have invested £1 million in maintaining repairing and improving house. There have been significant structural issues over the years including subsistence and rising dampness and boundary wall between numbers 21 and 23 was completely rebuilt.

Determination and Valuation

6. In the absence of the terms of the tenancies of the rental comparables provided by the landlord, the tribunal is unable to place any weight on that evidence. The tribunal notes the general level of growth in rental values in the St John’s Wood area. The tribunal has relied on its own expert, general knowledge of rental values in the area. We consider that the open market rent for the property on a standard assured shorthold tenancy, in the condition and with the amenities the market would expect would be in the region of £165,000 per year. From this level of rent we have made adjustments in relation to:

a. No carpets curtains or white goods b. a full repairing lease

The Tribunal has also made an adjustment for scarcity.

7. The full valuation is shown below:

8. The Tribunal determines a s70 rent of £66,000.00 per year.

Decision

9. The uncapped fair rent initially determined by the Tribunal, for the purposes of section 70, was £66,000 per year. The capped rent for the property according to the provisions of the Rent Acts (Maximum Fair Rent) Order 1999 is calculated at £70,600.50 per year. The calculation of the capped rent is shown on the decision form. In this case the lower rent of £66,000 per year is to be registered as the fair rent for this property.

Chairman: [NAME]: 20 May 2025

Fair rent PA Market rent 165,000.00 £ less FRI terms 50% 82,500.00 -£ adjusted rent 82,500.00 £ less scarcity off adj rent 20% 16,500.00 -£ Fair rent 66,000.00 £

4

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 request for full reasons should be made within a month. Any subsequent application for permission to appeal should be made on Form RP PTA

FR27 First-tier Tribunal – Property Chamber File Ref No. LON/00BK/F77/2025/0103

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were 23 [ADDRESS], [POSTCODE]

[NAME] [NAME]

Landlord

[NAME]

Tenant Mr & Mrs [APPELLANT]

1. The fair rent is £66000.00 Per year (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 20 May 2025

3. The amount for services is

Per

negligible/not applicable

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

Per

negligible/not applicable

5. The rent is/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)/ do not apply because 1st registration/15% exemption.

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

8. For information only:

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

(b) The fair rent to be registered is not limited by the Rent Acts (Maximum Fair Rent) Order 1999, because it is the same as/below the maximum fair rent of £70,600.50 .... per week ........... including £ ......................................... per week ........................ for services (variable) prescribed by the Order.

[NAME] of decision 20 May 2025

FR27 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 395.3

PREVIOUS RPI FIGURE Y 317.7

X 395.3 Minus Y 317.7 = (A) 77.60

(A) 77.6 Divided by Y 317.7 = (B) 0.24426

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) 1.29426

Last registered rent* 54,949.00 Multiplied by (C) = 70600.35 *(exclusive of any variable service charge)

Rounded up to nearest 50p = 70600.50

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

MAXIMUM FAIR RENT = £70,600.50 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.