First-tier Tribunal Sets Fair Rent for Property Based on Comparable Evidence

OUTCOME: Allowed

FR27 First-tier Tribunal – Property Chamber File Ref No. GB/LON/00AW/F77/2024/0232

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

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

[NAME] Valuer Mr [APPELLANT]

Landlord [APPELLANT] [NAME] Ms [APPELLANT]

1. The fair rent is 2015.50 Per month (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 14 October 2024

3. The amount for services is negligible Per month

negligible/not applicable

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

negligible Per month

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 (please see calculation overleaf).

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

None

8. For information only:

(a) 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 £ 2472 per month including £ nil per for services.

(b) The fair rent to be registered is not limited by the Rent Acts (Maximum Fair Rent) Order 1999, because it is the same as/below the maximum fair rent of £ ............ per ................ including £ ................................... per ............................ for services (variable) prescribed by the Order.

[NAME] of decision 14 October 2024

FR27 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 389

PREVIOUS RPI FIGURE Y 337.1

X 389 Minus Y 337.1 = (A) 52.8

(A) 52.8 Divided by Y 337.1 = (B) .1566

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) 1.2066

Last registered rent* 1670 Multiplied by (C) = 2015.07 *(exclusive of any variable service charge)

Rounded up to nearest 50p = 2015.50

Variable service charge NO If YES add amount for services

MAXIMUM FAIR RENT = £2015.50 Per 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.

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Case Reference : GB/LON/00AW/F77/2024/0232

Property : [ADDRESS], [POSTCODE]

Tenant

: Ms [APPELLANT]

Landlord : Ms [APPELLANT] [NAME] of Objection : 7 June 2024

Type of Application : Rent Act 1977

Tribunal

: [NAME] Valuer 079475 Mr [NAME] of Summary Reasons

: 14 October 2024

_______________________________________________

DECISION

The sum of £2015.50 per month will be registered as the fair rent with effect from 14 October 2024, being the date, the Tribunal made the Decision. ____________________________________

© CROWN COPYRIGHT 2023 FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

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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 and Hearing 2. The Tribunal inspected the property on 14 October 2024 prior to a hearing attended by Ms [COUNSEL], her representative Mr [COUNSEL] and Ms [COUNSEL]. All parties provided oral evidence on the condition of the property and recent improvements to the dwelling. Ms [NAME] offered the tribunal contemporaneous comparable rental transaction evidence.

3. Ms [NAME] told the tribunal she owned all six properties at No [ADDRESS] and that she had recently let at market rents flats Nos 1,2,3 and 5. All lettings were within the last 12 months. Details of the achieved market rentals are given below in table 1. She also advised the gross internal area (GIA) of flat no 6 is 685ft2. It is assumed the rents achieved at the recent lettings reflect all the features of the location including access to the community gated garden.

Table 1: Recent rents achieved for lettings at No [ADDRESS] 4. There were written submissions from both the parties which were reviewed and considered prior to the hearing.

Determination and Valuation 5. Having consideration of our own expert, general knowledge of rental values in the area and the analysis of the comparable rental evidence provided by the landlord, we consider that the open market rent for the property in a satisfactory condition would be in the region of £3,340 per month. This is equivalent to a rent of £4.92 per ft2 multiplied by the gross internal area of flat 6 at 685 ft2.

6. From this level of rent we have made adjustments to reflect any tenant improvements, disrepair and obsolescence at the property. The position of the flat accessed from narrow stairs at the top of the building is also reflected in the

3 achievable rent. Details of the adjustments made are shown in the valuation table below.

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

8. The full rental valuation is shown below:

Table 2: Fair rent valuation

9. The Tribunal determines a rent of £2,015 per month.

Decision 10. The uncapped fair rent initially determined by the Tribunal, for the purposes of section 70, was £2,472 per month. The capped rent for the property according to the provisions of the Rent Acts (Maximum Fair Rent) Order 1999 is calculated at £2,015.50 per month. The calculation of the capped rent is shown on the decision form. In this case the lower rent of £2,015.50 per month is to be registered as the fair rent for this property.

Chairman: [NAME]: 14 October 2024

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APPEAL PROVISIONS

You can only appeal this determination if the First-tier Tribunal decision was wrong on one or more points of law, and you must say why the First-tier Tribunal was wrong in law. 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