First-tier Tribunal Sets Fair Rent for Property

OUTCOME: Allowed

FR24 First-tier Tribunal – Property Chamber File Ref No. TR/LON/00BK/F77/2023/0339

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were 5 [ADDRESS], [POSTCODE]

Tribunal Judge I [NAME] [NAME] (Econ) MRICS

Landlord [APPELLANT]

Tenant Mr [APPELLANT]

1. The fair rent is 968.00 Per Calendar Month (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 16 January 2024

3. The amount for services is 80.90 Per

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

0.00 Per month

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

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 £1,286.50 per month including £80.90 per month for services prescribed by the Order.

Chairman Tribunal Judge I [NAME] of decision 16 January 2024

FR24 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 377.3

PREVIOUS RPI FIGURE Y 312.0

X 377.3 Minus Y 312.0 = (A) 65.3

(A) 65.3 Divided by Y 312 = (B) 0.20929

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) 1.25929

Last registered rent* 1021.50 Multiplied by (C) = 1,286.3696 *(exclusive of any variable service charge)

Rounded up to nearest 50p = £1,286.50

Variable service charge NO If YES add amount for services

MAXIMUM FAIR RENT = £1,286.50 Per

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.

1

Case Reference:

LON/00BK/F77/2023/0339

Property:

5 [ADDRESS], [POSTCODE]

Tenant `

Mr [APPELLANT]

Landlord :

[APPELLANT] of Objection:

27 September 2023

Type of Application: Section 70, Rent Act 1977

Tribunal:

Judge I [NAME] [NAME] (Econ) MRICS

Date of Summary Reasons

: 16 January 2024

_______________________________________________

DECISION

The sum of £ 98.18 per calendar month will be registered as the fair rent with effect from 16 January 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 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. [NAME] made written submissions.

Determination and Valuation 4. 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 its current condition would be in the region of £1,400 per calendar month. From this level of rent we have made adjustments in relation to:

the unrefurbished shower room/wc, poorly refurbished kitchenette, tenant's decorating obligation, curtains and floor coverings, partition and cooker.

5. The Tribunal has also made an adjustment for scarcity after excluding the service charge.

6. The full valuation is shown below:

per calendar month Market Rent

£1,400

Less Deductions above

)

) approx. 15% )

£210

£1,190 Less Service charge

£80.90

£1109.10 Less Scarcity

approx. 20%

£222

£887.10 Plus Service charge

£80.90

£968

7. The Tribunal determines a rent of £968 per calendar month.

Decision 8. The rent has not been capped under the provisions of the Rent Acts (Maximum Fair Rents) Order 1999.

Tribunal Judge: [NAME]: 16 January 2024

3 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