First-tier Tribunal Sets Fair Rent at £6,400 per Quarter

OUTCOME: Allowed

First-tier Tribunal – Property Chamber File Ref No. LON/00AW/F77/2023/0322

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were 41 [ADDRESS], [POSTCODE]

Judge [NAME]

Landlord [APPELLANT]:

Tenant Mr [APPELLANT]

1. The fair rent is £6,400 Per Quarter (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 11 December 2023

3. The amount for services is N/A Per N/A

negligible/not applicable

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

N/A Per N/A

negligible/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

7. Details (other than rent) where different from Rent Register entry

N/A

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 £7,811 per Quarter prescribed by the Order.

Chairman Judge Brandler Date of decision 11 December 2023

MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 377.8

PREVIOUS RPI FIGURE Y 305.5

X 377.8 Minus Y 305.5 = (A) 72.3

(A) 72.3 Divided by Y 305.5 = (B) 0.237

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) 1.287

Last registered rent* 6125 Multiplied by (C) = 7880.80 *(exclusive of any variable service charge)

Rounded up to nearest 50p = £7,881

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

MAXIMUM FAIR RENT = £7,881 Per Quarter

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/00BF/F77/2023/0322

Property : 41 [ADDRESS] [POSTCODE]

Tenant

: Mr [APPELLANT]

Landlord : [APPELLANT] : [COMPANY] of Objection : 12 September 2023

Type of Application : Section 70, Rent Act 1977

Tribunal

: Judge D [NAME] of Summary Reasons

: 11 December 2023

_______________________________________________

DECISION

The sum of £6,400 per quarter will be registered as the fair rent with effect from 11 December 2023, being the date the Tribunal made the Decision. ____________________________________

© CROWN COPYRIGHT 2023

FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

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 provided by the parties.

Evidence 3. There were no written submissions from either party.

Determination and Valuation 4. In the absence of any comparable evidence proved by the parties and having consideration for our own expert, general knowledge of rental values in the area, we consider that the open market rent for the property in its current condition would be in the region of £15,000 per quarter. From this level of rent we have made adjustments in relation to:

The tenants repairing and insuring obligations and the lack of central heating at the property

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

6. The full valuation is shown below:

per quarter Market Rent

£15,000

Less To reflect the tenants repairing and insuring obligations And the lack of central heating in the property Approx. 46%

£7,000

£8,000

Less Scarcity

approx. 20%

£1,600

£6,400

7. The Tribunal determines a rent of £6,400 per quarter and this equates to £2,133.33 per calendar month.

Decision 8. The uncapped fair rent initially determined by the Tribunal, for the purposes of section 70, was £15,000 per quarter. The capped rent for the property according to the provisions of the Rent Acts (Maximum Fair Rent) Order 1999 is calculated at £7,881

per quarter. The calculation of the capped rent is shown on the decision form. In this case the lower rent of £6,400 per quarter is to be registered as the fair rent or this property.

Chairman: Judge Brandler Date: 11 December 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