First-tier Tribunal Determines Fair Rent of £255 Per Week

OUTCOME: Allowed

FR27 First-tier Tribunal – Property Chamber File Ref No. HAV/24UB/F77/2024/0504

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were 84 [ADDRESS] [POSTCODE]

[NAME] Mr [APPELLANT]

Landlord The [APPELLANT]

Tenant Mr & Mrs [APPELLANT]

1. The fair rent is £255.00 Per Week (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 17 October 2024

3. The amount for services is £8.66 Per Week

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

n/a Per n/a

not applicable

5. The rent is 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 £284.66 per Week including £ 8.66 per Week for services (variable) prescribed by the Order.

[NAME] of decision 17 October 2024

FR27 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 389.9

PREVIOUS RPI FIGURE Y 293.5

X 389.9 Minus Y 293.5 = (A) 96.4

(A) 96.4 Divided by Y 293.5 = (B) 0.328

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) 1.378

Last registered rent* £200.00 Multiplied by (C) = £275.60 *(exclusive of any variable service charge)

Rounded up to nearest 50p = £276.00

Variable service charge YES If YES add amount for services £8.66

MAXIMUM FAIR RENT = £284.66 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.

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Case Reference

: HAV/24UB/F77/2024/0504

Property : 84 [ADDRESS] [POSTCODE]

Tenant

: [NAME]

Landlord : The [APPELLANT] of Objection : 7th May 2024

Type of Application : Section 70, Rent Act 1977

Tribunal

: Mr [NAME] Mr [NAME] of Summary Reasons

: 17th October 2024

_______________________________________________

DECISION

The sum of £255.00 per week will be registered as the fair rent with effect from 17th October 2024 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 Tenant 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.

Evidence

3. The Tribunal has consideration of the Rent Officers calculations. Neither party submitted any written submissions or evidence of rental levels for comparable properties in the area.

Determination and Valuation

4. Having consideration of our own expert, general knowledge of rental values in the Basingstoke area, we consider that the open market rent for the property in its current condition would be in the region of £300 per week. (£1,300 per month) From this level of rent we have made adjustments in relation to: no white goods, no carpets or curtains, tenants and terms of the tenancy which equates to approximately 15%

5. The Tribunal has not made an adjustment for scarcity as it considers there is a reasonable supply of similar rental properties in the general area

6. The full valuation is shown below:

Market Rent £300 pw

Less

approx. 15%

£45 Terms and condition

Leaves

£255

7. The Tribunal determines a rent of £255 per calendar week

3 Decision

8. The uncapped fair rent initially determined by the Tribunal, for the purposes of section 70, was £255 per week. The capped rent for the property according to the provisions of the Rent Acts (Maximum Fair Rent) Order 1999 is calculated at £284.66 inclusive of £8.66 service charge. per calendar week The calculation of the capped rent is shown on the decision form. In this case the lower rent of £255 per week is to be registered as the fair rent for this property effect from 17th October 2024 being the date the Tribunal made the Decision.

9. It is often the case that market rents are in excess of those that may be charged by a social landlord as it is a significant part of their remit to provide affordable housing. As such, depending on the type of tenancy agreement, their calculation of rent is either at a percentage of market rent or by way of index. Comparison is made with open market rather than limited to other properties which are offered by social housing providers. It is assumed that the landlord will by usual convention of social landlord’s not to seek to increase the rent proposed in its original notice as a result of this determination.

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