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

OUTCOME: Allowed

Page 1 of 3

First-tier Tribunal – Property Chamber File Ref No. HS/LON/00AZ/F77/2024/0075

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were 1 [ADDRESS], [POSTCODE]

Judge Foskett Mrs Flynn MA MRICS

Landlord [APPELLANT]

Tenant Mr [APPELLANT]

1. The fair rent is £210 Per week (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 12 April 2024

3. The amount for services is N/A Per

not applicable

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

N/A 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 the below the maximum fair rent of £ 234 per week prescribed by the Order.

Chairman Judge Foskett Mrs Flynn Date of decision 12 April 2024

Page 2 of 3

MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 381

PREVIOUS RPI FIGURE Y 314.3

X 381 Minus Y 314.3 = (A) 66.7

(A) 66.7 Divided by Y 314.3 = (B) 0.212218

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) 1.262218

Last registered rent* 185 Multiplied by (C) = 233.51 *(exclusive of any variable service charge)

Rounded up to nearest 50p = 234

Variable service charge NO If YES add amount for services

MAXIMUM FAIR RENT = £234 Per Week

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

Page 3 of 3

formula is ascertained the service charge is then added to that sum in order to produce the maximum fair rent.

SUMMARY REASONS

Background

1. The previous fair rent for this property registered on 29 November 2021 (with effect from 10 January 2022) was £185 per week (with the capping provisions of the Rent Acts (Maximum Fair Rent) Order 1999).

2. The Landlord indicated in an email to the Valuation Office on 26 October 2023 that it considered that the rent registered with effect from 10 January 2024 was too low because it had carried out internal and external works at a cost of approximately £22,600 and applied for a re-registration of the fair rent at £240.50 per week. The Tenant told the Tribunal at the inspection (see below) that these works were carried out in around July 2023.

3. The Rent Officer registered a new rent of £230 per week on 14 December 2023 with effect from 10 January 2024.

4. Following an objection made on 30 December 2023 on behalf of the Tenant to the determination by the Rent Officer, the Tribunal has made a determination under the provisions of the Rent Act 1977.

Inspection

5. The Tribunal inspected the property on 12 April 2024 in the morning in dry, sunny weather.

Evidence

6. 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

7. The property is terraced Victorian house. The accommodation comprises: a. Ground floor: 2 rooms, 1 kitchen and 1 bathroom/WC; b. First floor: 2 bedrooms It has central heating and a courtyard garden (maintained by the tenant, including the painting of the masonry).

8. Having regard to our own expert, general knowledge of rental values in the area (including by reviewing local properties on Rightmove.co.uk) as well as the list of comparable provided by the Landlord, we consider that the open

market rent for the property in the condition and with the amenities it has would be around £420 per week.

9. This hypothetical rent 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 Rent Act 1977. Any benefit derived from the tenant’s improvements (if any) is disregarded.

10. The following deductions were made:

Condition of kitchen

10% Condition of bathroom

5% No curtains or white goods provided by landlord 5% Damp

5% Electricity (very few sockets)

5% Poor layout

5% Poor double-glazing installed

2.5% Total

37.5%

11. That gave a fair rent of £262.50 per week (62.5% of £420 = £262.50). 12. A further deduction for scarcity of 20% was then made giving an uncapped fair rent for the purposes of section 70 of the 1977 Act of £210 per week.

Decision

13. The capped rent for the property according to the provisions of the Rent Acts (Maximum Fair Rent) Order 1999 is calculated at £234 per week (see calculation above). 14. In this case, the lower rent of £210 per week is to be registered as the fair rent for this property.

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

Date: 12 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.