First-tier Tribunal Sets Fair Rent for Property

OUTCOME: Allowed

FR27 First-tier Tribunal – Property Chamber File Ref No. LON/00BK/F77/2024/0245

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

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

Judge [NAME]

Landlord [APPELLANT]

Tenant Ms [APPELLANT]

1. The fair rent is £16,400 Per annum (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 22 October 2024

3. The amount for services is

Per

negligible

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

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 £19,067 per annum prescribed by the Order. .

Chairman Judge Dutton Date of decision 22 October 2024

FR27 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 388.6

PREVIOUS RPI FIGURE Y 323.5

X 388.6 Minus Y 323.5 = (A) 65.1

(A) 65.1 Divided by Y 323.5 = (B) 0.2012364

First application for re-registration since 1 February 1999 NO

If yes (B) plus 1.075 = (C)

If no (B) plus 1.05 = (C) 1.2512384

Last registered rent* 15,238 Multiplied by (C) = 19,066.37 *(exclusive of any variable service charge)

Rounded up to nearest 50p = £19,067

Variable service charge NO If YES add amount for services

MAXIMUM FAIR RENT = £19,067 Per annum

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.

FR27

1

Case Reference

: LON/00BK/F77/2024/02465

Property : [ADDRESS], [POSTCODE]

Tenant

: Ms [APPELLANT]

Landlord : [APPELLANT] of Objection : 11 June 2024

Type of Application : Section 70, Rent Act 1977

Tribunal

: Judge [NAME] of Summary Reasons

: 22 October 2024

_______________________________________________

DECISION

The sum of £16,400 per annum will be registered as the fair rent with effect from 22 October 2024, 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 and the submissions made by Ms [RESPONDENT] at the video hearing, which the landlord did not attend.

Evidence

3. The Tribunal has consideration of the written submissions provided by the Tenant and/the Landlord, which were confined to the reply part of the directions issued by the Tribunal on 15 August 2024

Determination and Valuation

4. Having consideration of our own expert and 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 £41,000 per annum. From this level of rent we have made adjustments to reflect the following: Lack of central heating, poor windows, limited access to the mezzanine level as a result of, amongst other issues, pigeon infestation, poor outdated shower room and separate WC, poor condition of the property generally including the bedroom on the second floor and the kitchen, lack of white goods and carpets and curtains and the tenancy terms and conditions when compared to an open market letting. Taking these matters into account we make a global reduction of the open market rent of 50%, bringing it down to £20,500

5. The Tribunal has also made an adjustment for scarcity of 20%.

6. The full valuation is shown below:

Market Rent

£41,000 per annum

Less Deduction as above

£20,500 per annum

£20,500 per annum

3 Less Scarcity at approx. 20%

£4,100

£16,400 per annum

7. The Tribunal determines a rent of £16,400 per annum

Decision

8. The rent we have determined is below the uncapped fair rent as shown on the tribunal’s Notice.

Chairman: Judge Dutton

Date: 22 October 2024

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