First-tier Tribunal Determines Rent for Semi-Detached House Near Industrial Estate

OUTCOME: Allowed

MR22 First-tier Tribunal – Property Chamber File Ref No. BIR/17UC/MNR/2021/0069

Notice of the Tribunal Decision and Register of Rents under Assured Periodic Tenancies (Section 14 Determination)

Housing Act 1988 Section 14

Address of Premises The Tribunal members were 107 [ADDRESS], [POSTCODE]

[NAME] Mrs [RESPONDENT]

Landlord [RESPONDENT] [ADDRESS], [POSTCODE]

Tenant A Hodgkinson & Lucy Lewis-Powell

1. The rent is: £630.00 Per Month (excluding water rates and council tax but including any amounts in paras 3)

2. The date the decision takes effect is: 16th November 2021

3. The amount included for services is not applicable

Per

4. Date assured tenancy commenced 16th August 2020

5. Length of the term or rental period Six Months

6. Allocation of liability for repairs As Per Landlord and Tenant Act

7. Furniture provided by landlord or superior landlord Carpets, Curtains, Built in oven/hub to fitted kitchen.

8. Description of premises A semi detached house comprising porch, hallway with stairs off dining room with doors to lounge and fitted kitchen. Rear lobby. Utility room. Bathroom. On the first floor are three bedrooms, box room, wc. Gas heating. Upvc double glazing. Rear garden, Shed.

[NAME] of Decision 19/01/2022

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : BIR/17UC/MNR/2021/0069 Property : 107 [ADDRESS] [POSTCODE] Applicant : [redacted] : None Respondent : [redacted] : None Type of application : Application under Section 13(4) of the Housing Act 1988 referring a notice proposing a new rent under an Assured Periodic Tenancy to the Tribunal Tribunal members : [NAME] S [NAME] Mrs [NAME] and Date of Determination : The matter was dealt with by a remote telephone hearing on 19th January 2022

DETAILED REASONS

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BACKGROUND

1. On 15th November 2021, the Applicants (tenants of the above property) referred to the Tribunal, a Notice of Increase of Rent served by the Respondent (landlord of the above property) under section 13 of the Housing Act 1988.

2. The Respondent’s Notice, which proposed a rent of £630.00 per month with effect from 16th November 2021, is dated 15th October 2021.

3. The date the tenancy commenced is stated on the Application Form as being 16th August 2020 and is an Assured Shorthold Tenancy. The current rent is stated in the Respondent’s Notice as being £595.00 per month.

4. The Tribunal issued its Decision following a telephone hearing on 19th January 2022. The Applicant subsequently requested written reasons and these detailed reasons are provided in response to that request.

INSPECTION

5. The Tribunal, carried out an inspection of the property on 19th January 2022 in the presence of the Respondent.

ACCOMMODATION

6. The property comprises a semi-detached house situated in an established residential area. To the rear of the property is an industrial estate. The house is of brick construction with part rendered elevations and a pitched tiled roof to the main house. Other residential properties in the immediate area are predominantly terraced.

7. Briefly the accommodation comprises of a porch, hallway with stairs off to the first floor and rear dining room. Doors from the dining room lead to the separate front lounge and to the rear kitchen which is well fitted incorporating a built-in oven and hob. There is a utility room off the kitchen and access to the cellar. The kitchen also leads to a rear lobby with door to the rear garden. The lobby leads to a well-appointed bathroom with three-piece sanitary suite and rainfall shower over the bath.

8. On the first floor the landing leads to two double bedrooms, a large single bedroom and boxroom. The landing also leads to a separate second W.C having a low flush suite and wash hand basin.

9. The house has gas fired central heating provided by the wall mounted boiler in the kitchen and UPVC double glazing.

10. The property is built up to the pavement at the front. To the rear is a private well laid out garden with brick-built stores. There is side access to [ADDRESS].

EVIDENCE

11. The Tribunal received written representations from both parties which were copied to the other party.

12. A telephone hearing was arranged which both parties attended.

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THE APPLICANT’S SUBMISSIONS

13. In their written submission and at the hearing the Applicants submitted that the proposed rental increase amounted to nearly double the level of inflation in the twelve months from when the tenancy was first agreed in August 2020. The Applicants also submitted that in their opinion the rental at that time was above market value however, due to the pandemic they were anxious to find a property as they were required to work from home as part of their employment in the public sector.

14. The Applicants submitted that the property was not situated in an affluent location or in an area which can demand a high rental price and they disputed the Respondent’s assessment.

15. The Applicants further submitted that the location of the property represented the lowest rental price in all the areas within a five-mile radius. They submitted that Pinxton was a small village in close proximity to junction 28 of the M1 Motorway and that the village itself was split into two areas. The north of the village was not subject to the constant odour and pollution from industrial units which were in the south of the village. The area in which the property was situated was dominated by a large industrial development which produced pollution and created a constant strong metallic and plastic odour which prevented them from enjoying any outside space.

16. The Applicants agreed with the Respondent that the property had good access to the M1 and A38, but submitted that it was some 15 miles to the nearest city and the nearest supermarket was approximately 3.4 miles away. There were no pavements to walk to this location and larger supermarkets were further afield. The Applicants further submitted that recent property sales in the village for properties backing directly onto industrial units in the south of the village could be as low as £50,000.00.

17. It was further submitted by the Applicants that the property was in close proximity to a stone supply yard and that the garden backed directly onto this and that the business was active six days a week. The noise generated was sufficiently loud to prevent windows being open or enjoyment of the garden. The Applicants stated that they had reported this to the Local Environmental Health Authority. In addition, the Applicants submitted that the property was next to a launderette from which an exhaust vented directly into the garden.

18. In conclusion the Applicants agreed with the Respondent that the house had been presented and finished to an appropriate standard but in their opinion the location was of greater significance in determining rental value.

THE RESPONDENT’S SUBMISSIONS

19. The Respondent submitted at the property was a large semi-detached house in the centre of the village with on road parking outside. The Respondent further submitted that the property had undergone extensive renovation immediately prior to the Applicants moving in. Included in this work was exterior decoration, re-fitted carpets and vinyl floor coverings, refitted kitchen and new sanitary fittings. The Respondent further submitted that the property had an attractive garden and patio area and a side passageway store with access to [ADDRESS].

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20. The Respondent submitted that she had based her rental assessment on other properties advertised on [NAME] which included three-bedroom semi-detached properties within a 5-mile radius of Pinxton which were marketed at monthly rentals between £650.00 - £700.00 per month.

21. The Respondent submitted that in her opinion the subject property was larger than the average semi-detached house and had a brand-new stylish interior. It was situated close to local shops and with excellent access to both the A38 and M1.

22. At the hearing the Respondent further submitted that she had recently placed the property on the market at an asking rental of £680.00 per month and over the previous few days had received some 31 enquiries. The Respondent acknowledged in questioning by the Tribunal that she had not yet agreed a new tenancy as the first viewing was due to take place later that afternoon but, she submitted, the asking rental of £680.00 per month was clearly not putting off prospective tenants. As such, the Respondent was of the opinion that the proposed rent of £630.00 per month with effect from November 2021 was fair.

THE LAW

23. In accordance with the terms of section 14 Housing Act 1988 the Tribunal proceeded to determine the rent at which it considered that the subject property might reasonably be expected to be let on the open market by a willing landlord under an assured tenancy.

24. In so doing the Tribunal, as required by section 14(1), ignored the effect on the rental value of the property of any relevant tenant's improvements as defined in section 14(2) of that Act.

THE TRIBUNAL’S DECISION

25. The Tribunal noted that the property was well presented and in generally good condition throughout. Although a fridge/freezer and washing machine were not included the property was certainly of a standard that would, in the opinion of the Tribunal, be sought after on the open market. In the opinion of the Tribunal the property was larger than many semi-detached houses having a cellar (which it is accepted may be of little practical use), utility room, boxroom and second W.C.

26. In coming to its decision, the Tribunal had regard to the members' own general knowledge of market rent levels in the area of Nottinghamshire and Derbyshire. Pinxton itself is a small village and although the Applicants referred to noise, smell and disturbance from the industrial development to the rear this was not evident at the time of the Tribunal’s inspection. However, the Tribunal accepts that some such disturbance is inevitable and this certainly contributes towards the generally lower level of rents in the immediate area than would otherwise be expected.

27. It was accepted by the Applicants that the property was in good condition and the only detriment to the house was its location.

28. Having regard to the general level of rents in the area, had the property not been so close to the industrial development the Tribunal determined the rental to be the sum of £700.00 per month. However, taking into account its location with an industrial estate at the rear and the inevitable disturbance that would at least from time to time occur, the Tribunal concluded that a discount of 10% (£70.00) was appropriate.

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29. The Tribunal therefore concluded that an appropriate market rent for the property would be £630.00 per month (£700.00 - £70.00).

30. The Tribunal therefore determined that the rent at which the property might reasonably be expected to be let on the open market would be £630.00 per month and therefore confirmed the rent specified in the landlord’s notice.

APPEAL

31. Any appeal against this Decision can only be made on a point of law and must be made to the Upper Tribunal (Lands Chamber). Prior to making such an appeal the party appealing must apply, in writing, to this Tribunal for permission to appeal within 28 days of the date of issue of this Decision, (or, if applicable, within 28 days of any decision on a review or application to set aside) identifying the decision to which the appeal relates, stating the grounds on which that party intends to rely in the appeal, and stating the result sought by the party making the application.

[NAME] First-tier Tribunal Property Chamber (Residential Property)