First-tier Tribunal Determines Fair Rent Under Rent Act 1977

OUTCOME: Allowed

1

Case Reference

: HS/LON/00AF/F77/2025/0143

Property : 46 [ADDRESS], [POSTCODE]

Tenant

: Mrs [APPELLANT] & Miss [APPELLANT]

Landlord : [NAME] of Objection : 26 February 2025

Type of Application : Section 70, Rent Act 1977

Tribunal

: Ms [NAME]

: 10 July 2025

_______________________________________________

DECISION

The sum of £544.50 per calendar month will be registered as the fair rent with effect from 10 July 2025, being the date the Tribunal made the Decision. ____________________________________

© CROWN COPYRIGHT 2023

FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

2 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.

Inspection

2. The Tribunal did not inspect the property but considered this case on the basis of the papers provided by the parties.

Evidence

3. The Tribunal issued Directions on 15 May 2025 inviting the parties to complete Reply Forms. No written submissions were received from the parties.

4. The Tribunal has consideration of the documents provided by the Rent Officer, which include the Landlord’s original application form.

5. The Property is a three-bedroom house with living room, kitchen and bathroom. There is no central heating.

Determination and Valuation

6. 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 good tenantable condition would be in the region of £2,000 per calendar month. From this level of rent we have made adjustments in relation to:

• The terms and conditions of the tenancy. • The Tenant having provided all white goods, floor and window coverings and other furnishings. • The lack of central heating.

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

8. The full valuation is shown below:

3

Per calendar month MARKET RENT £2,000 Less Terms of tenancy ) Tenant's provision of white goods, furniture, etc ) approx. 20% £400.00 No central heating )

Market rent less deductions £1,600.00 Less scarcity approx. 20% £320.00 Market rent less deductions and scarcity £1,280.00 ADJUSTED MARKET RENT £1,300

9. The Tribunal determines a rent of £1,300 per calendar month.

Shared Ownership Calculation

10. The Tenants own a 25% share of the Property.

11. The Landlord has provided a schedule showing applicable charges of £19.35 per calendar month.

12. The calculation of the Shared Ownership Rent is as follows:

Equivalent Fair Rent £1,300 Deduct Full Repairing Liability £195.00 Deduct Management, Insurance, Audit Fee £19.35 GROSS RENT £1,085.65 Adjust for Tenant's Share £814.24 Add Management, Insurance, Audit Fee £833.59 FAIR SHARED OWNERSHIP RENT £835

13. The Tribunal determines a Fair Shared Ownership Rent of £835 per calendar month.

Decision

14. The uncapped fair rent initially determined by the Tribunal, for the purposes of section 70, was £1,300 per calendar month. The Shared Ownership Fair Rent is calculated at £835 per calendar month. The capped rent for the property according to the provisions of the Rent Acts (Maximum Fair Rent) Order 1999 is calculated at £544.50 per calendar month. The calculation of the capped rent is shown on the decision form.

4 In this case the lower rent of £544.50 per calendar month is to be registered as the fair rent for this property.

15. The Tribunal notes that the current rent being paid is lower than the previously registered rent. The Landlord is entitled, but not compelled, to charge the Tenant rent at the registered figure from the effective date and may choose to charge a lower figure.

[NAME]: Ms S [NAME]: 10 July 2025

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 request for full reasons should be made within a month. Any subsequent application for permission to appeal should be made on Form RP PTA

FR27 First-tier Tribunal – Property Chamber File Ref No. HS/LON/00AF/F77/2025/0143

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were 46 [ADDRESS], [POSTCODE]

Ms S [NAME]

Landlord [NAME]

Tenant Mrs [APPELLANT] & [NAME]

1. The fair rent is £544.50 Per calendar month (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 10 July 2025

3. The amount for services is

Per

not applicable

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

Per

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

Gross rent: £1,085.65 per calendar month (25% ownership) Shared ownership rent: £835 per calendar month (uncapped)

8. For information only:

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 £835 per calendar month.

[NAME] of decision 10 July 2025

FR27 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 402.9

PREVIOUS RPI FIGURE Y 305.5

X 402.9 Minus Y 305.5 = (A) 97.4

(A) 97.4 Divided by Y 305.5 = (B) 0.3188

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) 1.3688

Last registered rent* £397.50 Multiplied by (C) = £544.11 *(exclusive of any variable service charge)

Rounded up to nearest 50p = £544.50

Variable service charge NO If YES add amount for services

MAXIMUM FAIR RENT = £544.50 Per calendar 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.