First-tier Tribunal Determines Fair Rent for Property

OUTCOME: Allowed

FR24 First-tier Tribunal – Property Chamber File Ref No. LON/00BG/F77/2021/0001

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were 96 [ADDRESS], [POSTCODE]

[NAME] [NAME]

Landlord BPT ([NAME] [APPELLANT]) Limited

Tenant [RESPONDENT]

1. The fair rent is 335.00 Per Week (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 21 April 2021

3. The amount for services is N/A Per

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

N/A Per

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

None.

8. For information only:

(a) 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 £474.00 per Week.

[NAME] [NAME] of decision Tuesday 21st April 2021

FR24 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 296.0

PREVIOUS RPI FIGURE Y 278.1

X 296.0 Minus Y 278.1 = (A) 17.9

(A) 17.9 Divided by Y 278.1 = (B) 0.06436

First application for re-registration since 1 February 1999 YES/NO

If yes (B) plus 1.075 = (C) NO

If no (B) plus 1.05 = (C) 1.11436

Last registered rent* £425.00 Multiplied by (C) = £473.60 *(exclusive of any variable service charge)

Rounded up to nearest 50p = £474.00

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

MAXIMUM FAIR RENT = £474.00 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.

Case Reference : LON/00BG/F77/2021/0001

P:PAPERREMOTE

Property : 96 [ADDRESS] [POSTCODE]

Applicant: [redacted]

Respondent: [redacted] : 18 March 2020

Type of Application : Determination of the registered rent under Section 70 Rent Act 1977

Tribunal

: Mrs [NAME] [NAME] and venue of : 21 April 2021 hearing

remote hearing on the papers

_______________________________________________

DECISION ____________________________________

The registered rent with effect from 21 April 2021 is £335 per week.

This has been a hearing on the papers which has been consented to by the parties. The form of remote hearing was P:PAPERREMOTE, a paper determination which is not provisional. A face to face hearing was not held because it was not practicable and all the issues could be determined on the papers. The documents that I was referred to are in a bundle, the contents of which I have recorded.

© CROWN COPYRIGHT FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

Background

1. On 13 January 2020 the landlord applied to the rent officer for registration of a fair rent of £488.75 per week for the above property.

2. The rent payable at the date of the application was £425 per week which had been registered by the rent officer on 20 February 2018 with effect from 11 April 2018.

3. On 4 March 2020, the rent officer registered a fair rent of £395 per week with effect from 11 April 2020.

4. On 18 March 2020 the landlord objected to the registered rent.

5. Owing to the Covid 19 restrictions the parties were asked if they would consent to the application being dealt with on the papers. Neither party objected. Written representations with photographs were received from the tenant, no representations were received from or on behalf of the landlord.

The Evidence

6. The property which is situated in [ADDRESS], convenient for local facilities and transport, comprises a two storey terrace house in a street of similar style houses. There is a through room, second reception and lean to scullery/kitchen on the ground floor and two bedrooms and a bathroom/shower/wc on the first floor. The property was rewired, had central heating installed and double glazing installed in about 2015. The tenant’s representative stated that the through room suffered from dampness.

7. The photographs provided showed that externally the front elevation was in fair condition although the parapet wall had been replaced with block work which had not been rendered to match the adjoining property. The rear windows did not appear to have been replaced with double glazed units. The scullery was very basic, with little provision for work tops, cupboards or food storage; there were exposed pipes running along the wall.

Valuation

8. In the first instance the Tribunal determined what rent the landlord could reasonably be expected to obtain for the property in the open market if it were let today in the condition that is considered usual for such an open market letting. As neither party provided any comparable open market rental evidence the Tribunal relied on its own general knowledge of market rent levels in [ADDRESS] and

surrounding areas. Having done so, it concluded that the likely market rent for the house would be £600 per week.

9. However, it was first necessary to adjust the hypothetical rent of £600 per week to allow for the differences between the terms and condition considered usual for such a letting and the condition of the actual property at the valuation date, ignoring any tenant’s

improvements, (disregarding the effect of any disrepair or other defect

attributable to the tenant or any predecessor in title). The Tribunal

noted that houses available on the open market were generally modern

or modernised, with white goods, floor and window coverings. The

Tribunal considered that these differences plus the terms and

conditions of the tenancy required a deduction of £180 per week.

10. This leaves an adjusted market rent for the subject property of £420 per week. The Tribunal was of the opinion that there was substantial scarcity in London for similar properties and therefore made a deduction of approximately 20% from the market rent to reflect this element. The Tribunal’s uncapped fair rent is £335 per week

11. The Tribunal’s uncapped fair rent is £335 per week.

Decision

12. The uncapped fair rent initially determined by the Tribunal, for the purposes of section 70, was accordingly £335 per week.

13. This is below the maximum fair rent that can be registered by virtue of the Rent Acts (Maximum Fair Rent) Order 1999 (Details are provided on the back of the decision form).

14. Accordingly the sum of £335 per week will be registered as the fair rent with effect from 21 April 2021 being the date of the Tribunal's decision.

Chairman: [NAME]: 21 April 2021