First-tier Tribunal Sets Market Rent at £650 per Month

OUTCOME: Allowed

MR22 First-tier Tribunal – Property Chamber File Ref No. CAM/00JA/MNR/2025/0684

Notice of the Tribunal Decision and Register of Rents under Assured Periodic Tenancies (Section 14 Determination)

Housing Act 1988 Section 14

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

[NAME] [NAME]

Landlord [RESPONDENT] [NAME] [RESPONDENT] and [ADDRESS], [POSTCODE]

Tenant J [APPELLANT]

1. The rent is: £ 650 Per month (excluding water rates and council tax but including any amounts in paras 3)

2. The date the decision takes effect is: 1 June 2025

3. The amount included for services is

not applicable Per

4. Date assured tenancy commenced 1 August 1993

5. Length of the term or rental period 24 months

6. Allocation of liability for repairs LL to comply with s11 LTA 1985

8. Furniture provided by landlord or superior landlord N/A

9. Description of premises The Property comprises an end-terraced period house providing a utility room, kitchen and lounge at ground floor with three bedrooms and bathroom at first floor. There is UPVC double glazing (installed by the Landlord) but no central heating. The floor finishes, curtains and White Goods belong to the Tenant who has carried out various improvements (as detailed below) and decorated throughout.

[NAME] of Decision 29 August 2025

© CROWN COPYRIGHT

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : CAM/00JA/MNR/2025/0684 HMCTS code : P:PAPERREMOTE

Property : 1 [NAME], [APPELLANT] [NAME], Oundle, [POSTCODE] Applicant (Tenant) : [APPELLANT] Respondent (Landlord) : [NAME] [NAME] of [NAME] : Determination of a Market Rent: Sections 13 and 14 Housing Act 1988 Tribunal members : Mr [NAME] [NAME] of Determination : 29 August 2025

DECISION

This has been a remote determination on the papers which the parties are taken to have consented to, as explained below. The form of determination was a paper determination described above as P:PAPERREMOTE The documents that the Tribunal was referred to are in bundles from the Applicant and the Respondent. The Tribunal has noted the contents and the decision is below.

2

Decision The Tribunal determined a market rent of £650 pm effective from 1 June 2025.

Reasons Background 1. The Landlord served notice under section 13 (2) of the Housing Act 1988 on 22 April 2025 to increase the passing rent from £520 per month to a headline rate of £650 per month prior to abatements with effect from 1 June 2025.

2. The Tenant made an [NAME] dated 8 May 2025 to the Tribunal in reliance on section 13 (4) of the Housing Act 1988.

3. This rent in all cases is stated to be exclusive of Council Tax, Water Charges and fixed service charges.

4. The Tribunal issued directions on 23 May 2025, inviting the Parties to submit any further representations (including any photographs and details of rentals for similar properties) they wished the tribunal to consider.

Property 5. The Tribunal inspected the Property on 21 July 2025 accompanied by Ms [APPELLANT] from [NAME] (for the Landlord) and the Tenant.

6. The Property comprises an end-terraced period house providing a utility room, kitchen and lounge at ground floor with three bedrooms and bathroom at first floor. There is UPVC double glazing (installed by the Landlord) but no central heating. The floor finishes, curtains and White Goods belong to the Tenant who has carried out various improvements (as detailed below) and decorated throughout.

7. There are signs of water staining and black mould which may be due, subject to further investigation, to blocked or incorrectly aligned guttering that appears to be unable to handle the volume of rainwater from the roof.

8. There is an exterior store together with a garage. The garage and utility appear to have an asbestos roof.

9. The Tenant has carried out landscaping to the front and rear gardens which are attractively maintained.

3 10. According to the floor plans provided by [NAME], the total floor space, excluding the garage and exterior store, extends to 667 ft2/62 m2. Tenancy 11. The Property was previously subject to a lease dated 29 June 1993 for a period of 24 months from 1 August 1993 at an initial rent of £250 per month.

12. Clause 4 (5) requires the Tenant: “To keep in good and complete repair, order, and condition (damage by accidental fire only excepted) the interior of the Property and the painting, papering and decorations thereof and the fixtures, fittings and appliances therein (except installations and things which the Landlord is liable hereunder or by law to repair)” 13. The Landlord’s repair and maintenance obligations are not explicitly set out albeit reference is made at clause 7 to the provisions of section 11 of the Landlord and Tenant Act 1985, further details of which are provided below.

14. Following expiry of this lease, a Statutory Periodic Lease arose. The Law 15. Section 5 (3) of the Act provides that the periodic tenancy arising on expiry of the Assured Shorthold Tenancy is one: “(a) taking effect in possession immediately on the coming to an end of the fixed term tenancy; (b) deemed to have been granted by the [NAME] under the fixed term tenancy immediately before it came to an end to the [NAME] under that tenancy; (c) under which the premises which are let are the same dwelling- house as was let under the fixed term tenancy; (d) under which the periods of the tenancy are the same as those for which rent was last payable under the fixed term tenancy; and (e) under which, subject to the following provisions of this Part of this Act, the other terms are the same as those of the fixed term tenancy immediately before it came to an end, except that any term which makes provision for determination by the landlord or the tenant shall not have effect while the tenancy remains an assured tenancy” 16. Section 14 (1) of the 1988 Act provides that the Tribunal is required to determine the rent at which the Property might reasonably be expected

4 to let in the open market by a willing landlord under an assured tenancy: a. “having the same periods as those of the tenancy to which the notice relates; b. which begins at the beginning of the new period specified in the notice; c. the terms of which (other than relating to the amount of rent) are the same as those of the existing tenancy.” 17. Section 14 (2) of the 1988 Act requires the Tribunal to disregard: a. “Any effect on the rent attributable to the granting of a tenancy to a sitting tenant; b. Any increase in the value of the dwelling-house attributable to a relevant improvement (as defined by section 14 (3) of the Act) otherwise than as an obligation; c. Any reduction in the value of the dwelling-house attributable to a failure by the tenant to comply with any terms of the tenancy.” 18. Section 11 of the Landlord and Tenant Act 1985 (the 1985 Act), provides that the Tribunal is to imply a covenant by the Landlord: a. “to keep in repair the structure and exterior of the dwelling- house (including drains, gutters and external pipes), b. to keep in repair and proper working order the installations in the dwelling-house for the supply of water, gas and electricity and for sanitation (including basins, sinks, baths and sanitary conveniences, but not other fixtures, fittings and appliances for [NAME] use of the supply of water, gas or electricity), and c. to keep in repair and proper working order the installations in the dwelling-house for space heating and heating water.” 19. Section 14 (7) of the 1988 Act states: “Where a notice under section 13(2) above has been referred to the appropriate tribunal, then, unless the landlord and the tenant otherwise agree, the rent determined by the appropriate tribunal (subject, in a case where subsection (5) above applies, to the addition of the appropriate amount in respect of rates) shall be the rent under the tenancy with effect from the beginning of the new period specified in the notice or, if it appears to the appropriate tribunal that that would cause undue hardship to the tenant, with effect from such later date (not being later than the date the rent is determined) as the appropriate tribunal may direct.”

5 Representations – The Tenant 20. The Tenant completed the [NAME] to which was attached a 4- page submission addressing: a. Initial improvements – house b. Initial improvements – garden c. Later improvements – house d. Later landscaping – gardens e. Notes f. Problems with the property g. Market rent comparisons 21. With regard to market rent comparisons, the Tenant referred to the passing rents in respect of Nos 2 and 5 [NAME] at £650 and £600 per month respectively and Fair Rents in respect of Nos 3 and 4 of £480 per month.

22. The Tenant closed this submission by stating: “We are astounded by the estate asking to increase our rent this year by 30% after paying a 45% increase 2 years ago. The estate has and will benefit greatly from our renovations and improvements, but we feel it would be grossly unfair for the estate to benefit financially from these improvements whilst we are still living in the property.” 23. The Tenant also provided a 2.5-page submission which detailed various improvements carried out and funded by her since taking occupation in 1993 initially by herself and, more latterly, together with her husband. Representations – The Landlord 24. Mr [RESPONDENT] of [NAME] completed the Reply Form on behalf of the Landlord and submitted a bundle of documents including a letter dated 10 June 2025 which set out his opinion on the following matters. a. The RPI has risen by 15% and the CPI has risen by 11% since the current rent of £520 pm was set b. Comparables average £950 pm c. Mr [NAME] considers that an allowance of 25% is appropriate to account for the tenant’s work and the core condition of the Property. This results in a calculated rent of £712.50 pm. d. The proposed rent of £650 pm takes account of the following matters:

6 i. Supplying and fitting of replacement kitchen units ii. Replacement of kitchen window (now double glazed by Landlord) iii. Supply and fitting of sitting room wood burning stove iv. Floor coverings v. Installation of additional power points throughout property vi. Garden landscaping, 25. Mr [NAME] also provided a schedule of seven properties in locations including [NAME], Tichmarsh, Lowick, Oundle, Thrapston and Kettering of various ages and configurations but all providing 2 bedrooms and at rents ranging from £825 pm to £1,100 pm.

26. The closest comparable, in terms of location, date of transaction and similarity, comprised 13 [NAME] which is a mid-terraced unit in the same terrace. This had been acquired by an investor, renovated, modernised and let at £975 pm in June 2025. According to Rightmove Sales Particulars, it benefits from 1 off-road parking space with a shared access and a stone outbuilding for storage. This was advertised on the basis of a 12-month letting. Determination 27. The Tribunal has had regard to all the correspondence and evidence provided by the Parties but is unable to refer to or make observations in respect of each point and document provided to it. The Tribunal would also stress that it has had the benefit of inspecting the Property.

28. In determining the market rent, the Tribunal has regard to prevailing levels of rent in the general locality and achieved rental values in respect of other properties of comparable accommodation and provision that would be likely to be considered by a prospective tenant.

29. The current rent, and the period that has passed since that rent was agreed or determined is not relevant. Previous changes in rent are therefore disregarded as the Tribunal is required to assess the rent that would be offered by a prospective tenant who has no knowledge of the existing or previous rents. Similarly, historic rents achieved elsewhere are of limited relevance.

30. As such, the Tribunal is unable to have any regard to the level of previous increases in rent as it is only concerned with market rent levels as at the effective date specified for the commencement of the new rent of 11 June 2025.

7 31. The Tribunal is also only able to have regard to market rents and must therefore disregard Fair Rents as they are calculated in accordance with the provisions of the Rent Act 1977 which applies different tests to the calculation of the rent payable.

32. The applicable legislation requires the Tribunal to have regard to market demand assuming that the landlord is willing. The Tribunal is therefore unable to have any regard to the personal circumstances or identities of the [NAME] landlord and tenant in assessing the level of rent.

33. It is therefore irrelevant whether or not the Landlord requires the rent to be at a certain level to fund its liabilities and/or its repair obligations under the lease or whether the Tenant feels that the services provided by the Landlord are “value for money.” As such, the cost of mortgage payments and property maintenance to the Landlord does not affect the rent that would be offered by a prospective tenant in the market and must be disregarded. Similarly, the ability, or otherwise, of the Tenant to pay the rent demanded cannot be taken into account.

34. In this regard, whilst the valuation exercise assumes that, regardless as to the condition of the Property, a hypothetical tenant would be prepared to take occupation and negotiate a rent, it does not follow that the [NAME] and the hypothetical tenant are one and the same. As such, the [NAME] may be prepared to pay a certain level of rent to remain in occupation for personal reasons whereas the hypothetical tenant is bidding on the assumption that the Property is vacant and to let.

35. This point is particularly relevant in this case as it is apparent that the Tenant has carried significant works that have had a material impact on value. The Tribunal has relied upon the evidence presented by the Landlord and Tenant to assume that these works were carried out with the consent of the Landlord should be disregarded in setting the rent payable.

36. It is therefore the case that the Tribunal has disregarded any potential for the Tenant to overpay to remain in occupation in order to retain the benefit of its works and has also assumed that the market would be bidding for the Property in the state that would have existed in the absence of these improvements.

37. In this regard, the Tribunal considers that the letting of 13 [NAME] for £975 per month carries the greatest weight albeit, that property has been fully modernised, comprises a mid-terraced house and provides only two bedrooms. Bearing in mind that the Property is an end-terraced house and provides an extra bedroom, it would be expected that, if it was available to let in a similar standard of modernisation, it would achieve a rent in excess of £975 pcm. As such, the Landlord’s starting point of £950 pm is not unreasonable.

8 38. However, it is also necessary to make deductions for the Tenant’s improvements/alterations, the lack of modernisation and and disrepair for which the Landlord is responsible.

39. Bearing these matters in mind, the Tribunal has reviewed all the evidence provided, relied upon its own expertise and knowledge of such matters and determines the market rental of the Property to be £650 per month. The rent payable may not, therefore, exceed this figure. However, this does not prevent the Landlord from charging a lower figure.

40. The Tribunal notes that the Landlord’s section 13 Notice proposes a phased increase in rent. The Tribunal has no jurisdiction in this regard and such agreements are entirely a matter for the Landlord and Tenant.

41. This rent is to be effective from 1 June 2025.

Name: [NAME] [NAME]: 29 August 2025

Rights of appeal

By rule 36(2) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013, the tribunal is required to notify the parties about any right of appeal they may have. If a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber), then a written [NAME] for permission must be made to the First-tier Tribunal at the regional office which has been dealing with the case. The [NAME] for permission to appeal must arrive at the regional office within 28 days after the tribunal sends written reasons for the decision to the [NAME]. If the [NAME] is not made within the 28-day time limit, such [NAME] 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 [NAME] for permission to appeal to proceed, despite not being within the time limit. The [NAME] 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 [NAME] the [NAME] is seeking. If the tribunal refuses to grant permission to appeal, a further [NAME] for permission may be made to the Upper Tribunal (Lands Chamber).