First-tier Tribunal Determines Fair Rent for Property

OUTCOME: Dismissed

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SUMMARY REASONS

Background

1. The Landlord applied to register a fair [NAME] by application dated 24 October 2023 and the [NAME] registered £17,775 per annum (including £1,779.21 per annum attributable to services by way of fixed service charge) with effect from 19 December 2023.

2. The previous [NAME] registered on 2 December 2021 (with effect from 21 January 2022) was £18,375 per annum (including £841.62 attributable to services by way of fixed service charge).

3. Following an objection made on behalf of the Landlord (made by email to the Valuation Office Agency on 8 January 2024) to the determination by the [NAME], the Tribunal has made a determination under the provisions of the [NAME] 1977.

Inspection

4. The Tribunal inspected the property in dry, sunny weather on 12 April 2024.

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 self-contained flat in a 1904 mansion block. The accommodation comprises 4 rooms (1 living room, 2 bedrooms and what is now a “TV room” but must previously have been another bedroom), 1 kitchen, 1 shower room and 1 WC on the ground floor of the mansion block. It has no central heating and is heated by some electric heaters and an electric fire. Hot water is produced by an immersion heater installed in the 1960s.

7. Having regard to our own [NAME], general knowledge of rental values in the area (including by reviewing local properties on [NAME]), we consider that the open market [NAME] for the property would be around £35,000 per annum.

8. This hypothetical [NAME] 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 [NAME] 2 of 3

Act 1977. Any benefit derived from the tenant’s improvements (if any) is disregarded.

9. The following deductions were made:

Condition of kitchen

10% Condition of bathroom

5% No central heating

5% State of electrical installation

2.5% No curtains or white goods provided by landlord 7.5% Damp

7.5% Total

37.5%

10. That gave a fair [NAME] of £21,875 per annum (62.5% of £35,000 = £21,875). 11. A further deduction for scarcity of 20% was then made giving an uncapped fair [NAME] for the purposes of section 70 of the 1977 Act of £17,500 per annum, including £1,779.21 per annum for fixed service charge.

Decision

12. The capped [NAME] for the property according to the provisions of the [NAME] ([NAME]) Order 1999 is calculated at £22,955 per week, including the figure of £1,779.21 per annum as fixed service charge (see calculation above).

13. In this case, the lower [NAME] of £17,500 per annum (uncapped) including £1,779.21 per annum for fixed service charge is to be registered as the fair [NAME] for this property.

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

Date: 12 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.

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First-tier Tribunal – Property Chamber File Ref No. HS/LON/00AT/F77/2024/0074

Notice of the Tribunal [NAME] 1977 Schedule 11

Address of Premises The Tribunal members were 42 [ADDRESS], [POSTCODE]

Judge Foskett Mrs Flynn MA MRICS

Landlord [APPELLANT]

Tenant Mrs [APPELLANT]

1. The fair [NAME] is £17,500 Per annum (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 12 April 2024

3. The amount for services is £1,779.21 Per annum

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

Per

not applicable

5. The [NAME] is not to be registered as variable.

6. The capping provisions of the [NAME] ([NAME]) Order 1999 apply (please see calculation overleaf).

7. Details (other than [NAME]) where different from [NAME] entry

8. For information only:

The fair [NAME] to be registered is not limited by the [NAME] ([NAME]) Order 1999, because it is below the maximum fair [NAME] of £ 22,955 per annum including £ 1,779.21 per annum for services prescribed by the Order.

Chairman Judge Foskett Mrs Flynn Date of decision 12 April 2024

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[NAME] FIGURE X 381

PREVIOUS RPI FIGURE Y 317.7

X 381 Minus Y 317.7 = (A) 63.3

(A) 63.3 Divided by Y 317.7 = (B) 0.199245

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) 1.249245

Last registered [NAME]* 18375 Multiplied by (C) = 22954.87 *(exclusive of any variable service charge)

Rounded up to nearest 50p = 22,955

Variable service charge NO If YES add amount for services

[NAME] = £22,955 Per Annum

Explanatory Note

1. The calculation of the maximum fair [NAME], in accordance with the formula contained in the Order, is set out above.

2. In summary, the formula provides for the maximum fair [NAME] to be calculated by:

(a) increasing the previous registered [NAME] 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 [NAME] determination was made.

4. The process differs where the tenancy agreement contains a variable service charge and the [NAME] is to be registered as variable under section 71(4) of the [NAME] 1977. In such a case the variable service charge is removed before applying the formula. When the amount determined by the application of the

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formula is ascertained the service charge is then added to that sum in order to produce the maximum fair [NAME].