First-tier Tribunal Sets Fair Rent for Property Under Rent Act 1977

OUTCOME: Allowed

FR27 First-tier Tribunal – Property Chamber File Ref No. GB/LON/00AN/F77/2024/0089

Notice of the Tribunal [NAME] 1977 Schedule 11

Address of Premises The Tribunal members were 174 [ADDRESS], [POSTCODE]

Judge Rosanna Foskett Mrs [NAME] MA MRICS

Landlord [COMPANY]

Tenant Ms [APPELLANT]

1. The fair [NAME] is £960 Per Calendar month (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 29 April 2024

3. The amount for services is N/A Per

negligible/not applicable

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

N/A Per

negligible/not applicable

5. The [NAME] is not to be registered as variable.

6. The capping provisions of the [NAME] ([NAME]) Order 1999 apply (please see calculation overleaf).

7. Details (other than [NAME]) where different from [NAME] entry

8. For information only:

The fair [NAME] to be registered is not limited by the [NAME] ([NAME]) Order 1999, because it is below the maximum fair [NAME] of £1,149 per calendar month prescribed by the Order.

Chairman Judge Rosanna Foskett Mrs [NAME] MA MRICS Date of decision 29 April 2024

FR27 [NAME] LATEST RPI FIGURE X 383

PREVIOUS RPI FIGURE Y 314.3

X 383 Minus Y 314.3 = (A) 68.7

(A) 68.7 Divided by Y 314.3 = (B) 0.218581

First application for re-registration since 1 February 1999 NO

If yes (B) plus 1.075 = (C)

If no (B) plus 1.05 = (C) 1.268581

Last registered [NAME]* 905.67 Multiplied by (C) = 1148.92 *(exclusive of any variable service charge)

Rounded up to nearest 50p = 1149

Variable service charge NO If YES add amount for services

[NAME] = £1149 Per Cal month

Explanatory Note

1. The calculation of the maximum fair [NAME], in accordance with the formula contained in the Order, is set out above.

2. In summary, the formula provides for the maximum fair [NAME] to be calculated by:

(a) increasing the previous registered [NAME] 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 [NAME] determination was made.

4. The process differs where the tenancy agreement contains a variable service charge and the [NAME] is to be registered as variable under section 71(4) of the [NAME] 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 [NAME].

FR27

SUMMARY REASONS

Background 1. The previous fair [NAME] for this property registered with effect from 15 January 2022 was £905.67 per calendar month.

2. Following an application by the Landlord on 26 October 2023, with effect from 15 January 2024, the [NAME] registered the fair [NAME] at £936 per calendar month.

3. Following an objection dated 17 January 2024 made by the Landlord to the determination by the [NAME], the Tribunal has made a determination under the provisions of the [NAME] 1977.

Inspection 4. No party requested an inspection by the Tribunal.

Evidence 5. The Tribunal considered the documents that had been sent by the Valuation Office Agency, the Landlord and the Tenant. There was no oral hearing.

Determination and Valuation 6. The property is a self-contained flat within a converted Victorian terraced house. The accommodation comprises 2 rooms, 1 kitchen, 1 bathroom/WC and a garden. There is no central heating. No photographs or other descriptions of the condition of the property were provided, apart from the [NAME]’s notes on the adjustments made to the open market [NAME], which noted that the Tenant was liable for decoration, the Landlord provided no floor coverings, curtains or white goods and the kitchen is unmodernised. There may have been certain other notes made in relation to the adjustments but the Tribunal was unable to see them on the screenshot submitted showing the [NAME]’s calculations.

7. Having regard to our own [NAME], general knowledge of rental values in the area (including based on comparable figures for properties in the area which have actually been let), we consider that the open market [NAME] for the property would be around £2,000 per calendar month.

8. This hypothetical [NAME] is adjusted as necessary to allow for the differences between the terms and conditions considered usual for such a letting in today’s market and the condition of the actual property at the date of the determination under the [NAME] 1977. Any benefit derived from the tenant’s improvements (if any) is disregarded.

9. The Tribunal made adjustments amounting to 40% of the open market [NAME] in line with the [NAME]’s notes on the condition of the property.

10. That gave a fair [NAME] of £1,200 per calendar month.

11. A further deduction for scarcity of 20% was then made giving an uncapped fair [NAME] for the purposes of section 70 of the 1977 Act of £960 per calendar month.

FR27

Decision 12. The capped [NAME] for the property according to the provisions of the [NAME] ([NAME]) Order 1999 is calculated at £1,149 per calendar month (see calculation above). 13. In this case, the lower [NAME] of £960 per calendar month is to be registered as the fair [NAME] for this property.

Chairman: Judge Rosanna Foskett, Mrs [NAME] MA MRICS

Date: 29 April 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 subsequent application for permission to appeal should be made on Form RP PTA.