First-tier Tribunal Sets Fair Rent for Residential Property

OUTCOME: Allowed

FR27 First-tier Tribunal – Property Chamber File Ref No.

LON/00BE/F77/2025/0176

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were 2,121 [ADDRESS] [POSTCODE]

Judge M Tildesley Mrs S Redmond MRICS

Landlord [APPELLANT] c/o [NAME]

Tenant Mr [APPELLANT]

1. The fair rent is £1,152 Per Calendar month (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 29th July 2025

3. The amount for services is

Per

not applicable

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 £1,190.00 per calendar month prescribed by the Order.

[NAME] of decision 29th July 2025

FR27 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 404.5

PREVIOUS RPI FIGURE Y 360.4

X 404.5 Minus Y 360.4 = (A) 44.1

(A) 44.1 Divided by Y 360.4 = (B) 0.122364

First application for re-registration since 1 February 1999 NO

If yes (B) plus 1.075 = (C)

If no (B) plus 1.05 = (C) 1.172364

Last registered rent* 1,015 Multiplied by (C) = 1,189.94 *(exclusive of any variable service charge)

Rounded up to nearest 50p = 1,190

Variable service charge NO If YES add amount for services

MAXIMUM FAIR RENT = £1,190 Per Calendar 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.

© CROWN COPYRIGHT

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case Reference :

LON/00BE/F77/2025/0176

Property :

[ADDRESS], [POSTCODE]

Applicant: [redacted]

[COMPANY] (Landlord) Representative : [COUNSEL], Property Manager, [NAME] Respondent: [redacted]

[NAME] (Tenant)

Representative :

Type of Application : S.70 Rent Act 1977 – Determination of a new fair rent Tribunal Members : Judge Tildesley OBE Mrs S Redmond MRICS Date and venue of Meeting : On the papers Date of Decision : 29 July 2025

REASONS FOR DECISION

Summary of the Decision

1 The Tribunal determines that the amount of rent to be registered as the fair rent for [ADDRESS], [POSTCODE] is £1,152 per calendar month to take effect from the date of the decision (29 July 2025).

2

Background

2 By an application dated 29 November 2024 the landlord applied to the Rent Officer for registration of a fair rent. The fair rent registered at the time of the application was £1,105 per month with effect from 13 December 2022. The landlord requested a rent of £1,215 per month.

3 With effect from 13 January 2025, the Rent Officer registered a fair rent of £1,152 per month. There was no service charge element. On 27 January 2025 the tenant objected to the new fair rent. The Tribunal was notified of this objection and of the request for a fresh determination of the rent.

Directions

4 On 5 June 2025 the Tribunal directed it would seek to decide the fair rent for the property during the 14 days following 28 July 2025 based on the written submissions by the parties unless a party requested a hearing. The Tribunal also required the parties to complete a reply form giving details of the property and any further comments they wished to make.

5 The parties did not request a hearing and an inspection of the property. The landlord completed a reply form which was sent to the Tribunal and the tenant. The tenant did not respond to the Tribunal’s request to complete a reply form.

The Evidence

6 The property is a self-contained converted flat situated on the first floor of a semi-detached building. The property is in the ward of [ADDRESS] in the London Borough of Southwark and close to amenities and transport links. The property has been modernised and comprises one bedroom, a living room, kitchen, and a bathroom with a WC with access to a private garden at the front of building. The property benefits from central heating and double glazing. The landlord supplies the white goods, whilst the tenant provides the carpets and curtains. The landlord described the condition of the living room, bedroom and bathroom as good, and the condition of the kitchen as average. The landlord identified no defects with the property.

7 The tenancy for the property commenced on 24 June 1985. The Tribunal understands there is no written agreement. The parties accept that the landlord is responsible for external repairs and decorations, and the tenant is responsible for internal decorations subject to section 11 of the Landlord and Tenant Act 1985.

3 8 The parties supplied no evidence of rents for comparable properties. The tenant’s objection to the new fair rent of £1,152 was that it represented an increase of nearly 14 per cent from the previous rent of £1,015 which he considered to be too high and unfair.

Consideration

9 When determining a fair rent the Tribunal, in accordance with section 70 of the Rent Act 1977 must have regard to all the circumstances including the age, location and state of repair of the property. The Tribunal, however, must disregard the effect of (a) any relevant tenant's improvements and (b) the effect of any disrepair or other defect attributable to the tenant or any predecessor in title under the regulated tenancy, on the rental value of the property.

10 [COMPANY] v [NAME] of the Greater Manchester Rent Assessment Committee (1995) 28 HLR 107 and [NAME] v [NAME] [1999] QB 92 the Court of Appeal emphasized

(a) that ordinarily a fair rent is the market rent for the property discounted for 'scarcity' (i.e. that element, if any, of the market rent, that is attributable to there being a significant shortage of similar properties in the wider locality available for letting on similar terms - other than as to rent - to that of the regulated tenancy) and

(b) that for the purposes of determining the market rent, assured tenancy (market) rents are usually appropriate comparables. (These rents may have to be adjusted where necessary to reflect any relevant differences between those comparables and the subject property).

11 The Tribunal has before it brief details of the Rent Officer’s assessment of the fair rent. The Tribunal is not bound by the Rent Officer’s findings and is entitled to reach its own decision based upon its own findings.

12 The Tribunal starts with its assessment of the open market rent for the property. The parties have not supplied evidence of rents for comparable properties. The Tribunal applying its expertise and general knowledge of market rent levels in and around [ADDRESS] considers that the market rent for the property in good condition and let on normal Assured Shorthold Tenancy (AST) terms would be £1,600 per month. This gives the appropriate starting point from which to determine the fair rent of the property as it falls to be valued.

13 The Tribunal finds that the property is not let on the same terms as would be expected in a flat let on an AST with an open market rent. In this case the tenant provides the carpets and curtains and has a decorating responsibility which in the Tribunal’s view merits a deduction of 10 per cent of the market rent equivalent to £160. This leaves an adjusted rent of £1,440 per month.

4

14 The Tribunal next considers the element of scarcity and whether demand exceeds supply. The Tribunal applying its expertise and general knowledge finds that there is scarcity in the Greater London area for this type of property and makes a further deduction of 20 per cent from the adjusted market rent. This provides a fair rent of £1,152 per month (£1,440-£288). This is below the Maximum Fair Rent Cap of £1,190 per month so no further adjustments are necessary.

Decision

15 The Tribunal determines that the amount of rent to be registered as the fair rent for [ADDRESS], [POSTCODE] is £1,152 per calendar month to take effect from the date of the decision (29 July 2025).

5 RIGHTS OF APPEAL

1. If a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber), then a written application for permission must be made to the First-tier Tribunal at the Regional Office which has been dealing with the case. The application should be made on Form RP PTA available at https://www.gov.uk/government/publications/form-rp- pta-application-for-permission-to-appeal-a-decision-to-the-upper- tribunal-lands-chamber

2. The application for permission to appeal must arrive at the Regional Office within 28 days after the Tribunal sends written reasons for the decision to the person making the application.

3. If the application is not made within the 28-day time limit, such application must include a request for an extension of time and the reason for not complying with the 28-day time limit; the Tribunal will then look at such reason(s) and decide whether to allow the application for permission to appeal to proceed, despite not being within the time limit.

4. The application for permission to appeal must identify the decision of the Tribunal to which it relates (i.e. give the date, the property and the case number), state the grounds of appeal and state the result the party making the application is seeking. Please note that if you are seeking permission to appeal against a decision made by the Tribunal under the Rent Act 1977, the Housing Act 1988 or the Local Government and Housing Act 1989, this can only be on a point of law.

5. If the First-tier Tribunal refuses to grant permission to appeal, a further application for permission may be made to the Upper Tribunal (Lands Chamber).