First-tier Tribunal Determines Fair Rent for Property

OUTCOME: Allowed

FR27 First-tier Tribunal – Property Chamber File Ref No. HS/LON/00BH/F77/2023/0229

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were 47 [ADDRESS], [POSTCODE]

[NAME] [NAME]

Landlord [APPELLANT]

Tenant Mrs [APPELLANT]

1. The fair rent is £25200.00 Per annum (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 20 September 2023

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 ................................... including £ ...................... per ................................. 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 £ 30996.50 .... per Annum ....... including £ ......................................... per ................................. for services (variable) prescribed by the Order.

[NAME] of decision 20 September 2023

FR27 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 376.6

PREVIOUS RPI FIGURE Y 304

X 376.6 Minus Y 304 = (A) 72.6

(A) 72.6 Divided by Y 304 = (B) 0.238815

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) 1.288616

Last registered rent* 24050 Multiplied by (C) = 30996.02 *(exclusive of any variable service charge)

Rounded up to nearest 50p = 30996.50

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

MAXIMUM FAIR RENT = £30996.50 Per annum

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.

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Case Reference

: HS/LON/00BH/F77/2023/0229

Property : 47 [ADDRESS], [POSTCODE]

Tenant

: Mrs [APPELLANT]

Landlord : [APPELLANT] of Objection : 13 July 2023

Type of Application : Section 70, Rent Act 1977

Tribunal

: Mr [NAME] [NAME] of Summary Reasons

: 20 September 2023

_______________________________________________

DECISION

The sum of £25,200.00 per annum will be registered as the fair rent with effect from 20 September 2023, being the date the Tribunal made the Decision. ____________________________________

© CROWN COPYRIGHT 2023

FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

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SUMMARY 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.

Evidence

3. There were no written submissions from the parties.

Determination and Valuation

4. Having consideration of our own expert, general knowledge of rental values in the area, we consider that the open market rent for the property in the condition the market would expect for a new letting on an AST would be in the region of £70,000 per annum (£5833.33 per calendar month). From this level of rent we have made adjustments in relation to:

The assumed dated condition of the house lacking central heating, a modern kitchen and bathroom and occupied since 1961.

The full repairing obligations of the tenant

5. The Tribunal has also made an adjustment for scarcity.

6. The full valuation is shown below:

7. The Tribunal determines a rent of £25,200.00 per annum and this equates to £2,100.00 per calendar month. Fair rent PA Market rent 70,000.00 £ less condition & terms 55% 38,500.00 -£ adjusted rent 31,500.00 £ less scarcity off adj rent 20% 6,300.00 -£ Fair rent 25,200.00 £

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Decision

8. The uncapped fair rent initially determined by the Tribunal, for the purposes of section 70, was £25,200.00 per annum. The capped rent for the property according to the provisions of the Rent Acts (Maximum Fair Rent) Order 1999 is calculated at £30996.50 per annum. The calculation of the capped rent is shown on the decision form. In this case the lower rent of £25,200.00 per annum is to be registered as the fair rent or this property.

Chairman: [NAME]: 20 September 2023

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