Tribunal Sets £900/Month Rent for Assured Tenancy in London

OUTCOME: Allowed

FR27

SUMMARY REASONS

Background 1. The previous fair rent for this property registered with effect from 3 November 2020 was £788.50 per calendar month.

2. Following an application by the Landlord, with effect from 15 December 2023, the Rent Officer registered the fair rent at £994 per calendar month, applying the capping provisions prescribed by the Rent Acts (Maximum Fair Rent) Order 1999.

3. Following an objection made by the Tenant to the determination by the Rent Officer, the Tribunal has made a determination under the provisions of the Rent Act 1977.

Inspection 4. No party requested an inspection by the Tribunal.

Evidence 5. The Tribunal considered the documents that had been sent by the Valuation Office Agency, the Landlord and the Tenant. There was no oral hearing.

Determination and Valuation 6. The property is non self-contained flat (where the bathroom is the floor below the rest of the flat) within a Victorian building. The accommodation comprises 2 rooms, 1 kitchen, 1 bathroom/WC. No photographs or other descriptions of the condition of the property were provided, apart from the Rent Officer’s notes on the adjustments made to the open market rent, which noted that the Tenant was liable for decoration, there is no central heating and the Landlord provided no floor coverings, curtains or white goods. There may have been certain other notes made in relation to the adjustments but the Tribunal was unable to see them on the screenshot submitted showing the Rent Officer’s calculations.

7. Having regard to our own expert, general knowledge of rental values in the area (including based on comparable figures for properties in the area which have actually been let), we consider that the open market rent for the property would be around £2,600 per calendar month.

8. This hypothetical rent is adjusted as necessary to allow for the differences between the terms and conditions considered usual for such a letting in today’s market and the condition of the actual property at the date of the determination under the Rent Act 1977. Any benefit derived from the tenant’s improvements (if any) is disregarded.

9. The Tribunal made adjustments amounting to 50% of the open market rent in line with the Rent Officer’s notes on the condition of the property and the submissions of the Tenant (who noted in particular the poor layout of the property).

10. That gave a fair rent of £1,125 per calendar month.

11. A further deduction for scarcity of 20% was then made giving an uncapped fair rent for the purposes of section 70 of the 1977 Act of £900 per calendar month.

FR27

Decision 12. The capped rent for the property according to the provisions of the Rent Acts (Maximum Fair Rent) Order 1999 is calculated at £1,068.50 per calendar month (see calculation above). 13. In this case, the lower rent of £900 per calendar month is to be registered as the fair rent for this property.

Chairman: Judge Rosanna Foskett, Mrs [NAME] MA MRICS

Date: 29 April 2024

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.

FR27 First-tier Tribunal – Property Chamber File Ref No. LON/00AW/F77/2024/0088

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were Flat 4, 31 [NAME], London, [POSTCODE]

Judge Rosanna Foskett Mrs [NAME] MA MRICS

Landlord [APPELLANT]

Tenant Mr [APPELLANT]

1. The fair rent is £900 Per Calendar month (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 29 April 2024

3. The amount for services is N/A Per

negligible/not applicable

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

N/A Per

negligible/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 not limited by the Rent Acts (Maximum Fair Rent) Order 1999, because it is below the maximum fair rent of £1,068.50 per calendar month prescribed by the Order.

Chairman Judge Rosanna Foskett Mrs [NAME] MA MRICS Date of decision 29 April 2024

FR27 MAXIMUM [NAME] X 383

PREVIOUS RPI FIGURE Y 293.5

X 383 Minus Y 293.5 = (A) 89.5

(A) 89.5 Divided by Y 293.5 = (B) 0.304940

First application for re-registration since 1 February 1999 NO

If yes (B) plus 1.075 = (C)

If no (B) plus 1.05 = (C) 1.354940

Last registered rent* 788.50 Multiplied by (C) = 1068.37 *(exclusive of any variable service charge)

Rounded up to nearest 50p = 1068.50

Variable service charge NO If YES add amount for services

MAXIMUM FAIR RENT = £1068.50 Per Cal 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.

FR27