First-tier Tribunal Sets Market Rent for Property

OUTCOME: Allowed

1 Case Reference : CAM/00KB/MNR/2022/0122 Property : 5 [ADDRESS] [POSTCODE] Applicant (Tenant) : Ms [APPELLANT] Respondent (Landlord): [APPELLANT] (Agent) : [COMPANY] (Ms [COUNSEL]) Type of Application : Determination of a market rent under Section 13 of the Housing Act 1988 Tribunal Members : Judge JR [NAME] MA MRICS Date of Decision : 6th March 2023 _______________________________________________

DECISION ____________________________________ © CROWN COPYRIGHT 2023

DECISION 1. The Tribunal determined a rent of £1,050.00 per calendar month to take effect from 1st January 2023.

REASONS THE TENANCY 2. The Tenancy commenced as a contractual monthly periodic Assured Shorthold Tenancy on 1st August 2016 for a period of 6 months at a rent of £855.00 per calendar month and continued thereafter as a statutory tenancy on the same terms. Section 11 of the Landlord and Tenant Act 1985 applies in respect of the Landlord’s repairing obligations. The Tenancy Agreement did not contain a restriction on the use of the garage or hardstanding or on the number of tenants. THE REFERRAL 3. The current rent is £990.00 per calendar month. By a notice in the prescribed form dated 25th November 2022 the Landlord proposed a new rent of £1,065.00 per calendar month from 1st January 2023. FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

2 4. On 22nd December 2022 the Tenant referred the notice proposing a new rent to the Tribunal. Directions were issued on 9th January 2023 informing the parties that the Tribunal did not intend to hold an oral hearing or inspection unless a request was made by 13th February 2023. Neither party made a request for a hearing or inspection. The Parties completed the Reply Form attached to the Directions. THE LAW 5. The relevant law is in section 14 of the Housing Act 1988 which is summarised below.

6. By virtue of section 14 (1) Housing Act 1988 the Tribunal is to determine a rent at which the dwelling-house concerned might reasonably be expected to be let in the open market by a willing landlord under an assured periodic 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 subject Tenancy 7. By virtue of section 14 (2) Housing Act 1988 in making a determination the Tribunal shall 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) Housing Act 1988) carried out by a tenant otherwise than as an obligation; and (c) any reduction in the value of the dwelling-house due to the failure of the Tenant to comply with any terms of the subject Tenancy.

8. Nothing in section 14 affects the right of the landlord and the tenant under an assured tenancy to vary by agreement any term of the tenancy (including a term relating to rent). [NAME]

9. The Tribunal did not inspect [NAME] and the following description is obtained from the Reply Forms included with the Directions and completed by the parties, photographs provided by the Tenant, an Inventory and Record of Condition provided by the [NAME] and the internet. 10. [NAME] is a semi-detached bungalow which appears to be of a modular prefabricated construction with rendered walls under a pitched concrete tile roof built circa 1950. The windows are double glazed in white powder coated metal frames set in timber surrounds as are the doors. The front elevation below the windows of the living rooms are timber panelled. There is a garden to the front with hard standing providing off road parking for two vehicles and a garden to the rear with an outbuilding. [NAME] comprises two living rooms (17.93 m2 7 & 16.87 m2), a kitchen (16.872 m2), three bedrooms (12.4 m2, 13.20m2 & 12.92 m2) and a bathroom with w.c. a

3 hallway, a cloakroom with wash hand basin and w.c. There is a storage cupboard in one of the living rooms and each of the bedrooms. Services Space and water heating is by a gas fired central heating system. [NAME] has mains electricity, gas, water and drainage. [NAME] is let unfurnished. A carpet and an oven are provided by the Landlord all other floorcoverings and white goods are those of the Tenant. [NAME] is situated in a residential estate in Upper Heyford 8 miles from Bicester where there is a range of amenities. CONDITION 11. Externally, [NAME] appears to be in no more than fair condition. The timber panelling below windows of the living rooms is in need of redecoration as are the timber thresholds of the doors. [NAME] appeared to be poorly insulated which is common in relation to prefabricated dwellings constructed in the 1950s.

12. The large shed is now missing its roof and from the photographs has lost its structural integrity. The small shed is also in a similarly dilapidated condition.

13. Internally, it was apparent from the Inventory and Record of Condition prepared on 1st July 2016 that there is a fitted galley kitchen with units both sides which is now dated and deteriorating. The white bathroom suite would appear to be serviceable although with signs of wear. The signs of mould throughout the building indicate a lack of insulation resulting in difficulty in heating [NAME] adequately. A new boiler has been fitted but not the works to make good or the old boiler removed. REPRESENTATIONS 14. The Parties made written representations together with photographs. Tenant’s Representations 15. The Tenant said that  The bungalow was in the lowest Council Tax Band A indicating it was of poor standard.  There has been external painting and a new boiler but the old boiler has not been removed.  The windows are draughty.  Mould has formed on the walls and ceilings because [NAME] is so cold and the heating has to be kept on to stay warm.  The sheds are a safety hazard.  The doors to the rooms and the cupboards do not fit properly as they once did.  The Tenant referred to a letter dated 20th February 2017 in which the Landlord said that in December 2013 it had been intended to refurbish the [NAME] properties externally and internally. However,

4 the letter went on to say that it was now intended only to refurbish the outside of the bungalows.  Reference was made to a further letter dated 23rd March 2021 in which the Landlord stated that it would replace the existing asbestos fascias, soffits and guttering and repaint the external render. The Tenant alluded to this work having been carried out.

16. In addition, the Tenant stated that:  The increase in rent was not realistic or fair for what she said were substandard bungalows when compared with those close to Bicester.  There had been no improvements to [NAME] in the last year.  There had been no gas boiler inspection this year  There had been no Electrical Installation Condition Report or electrical repairs e.g., to a broken socket.  The sheds are in a dilapidated state.  The windows are draughty and the Tenant says she has to use a dehumidifier and clean the black mould off monthly. She said this was exacerbated by a leak from the guttering and fascia which was remedied and the windows have been resealed but the mould still forms and the windows are still draughty. Landlord’s Representations 17. The [NAME] said that [NAME] is one of over 200 2, 3 and 4-bedroom bungalows owned by the Landlord The size of each bungalow proportionate to the number of bedrooms is the same. The Living room in [NAME] was originally open plan but prior to the commencement of the Tenancy was divided creating two rooms which it was submitted was an enhancement.

18. With regard to the increase in rent the [NAME] referred to a valuation Report dated 2nd December 2021 prepared for [ADDRESS], Upper Heyford Bicester a new build two storey end of terrace house for which a rent of £1,500.00 per calendar month was assessed by [NAME]. It was said that it was produced to show that Bicester was a popular location.

19. The [NAME] provided a list of rents for similar three-bedroom bungalows owned by the Landlord which ranged from £1,095.00 to £1,250.00 per calendar month which had been set during 2022. The Agent said that the difference in rents reflected the respective conditions of the bungalows and that [ADDRESS], let at £1,100.00 per calendar month, was a similar size plot to [NAME].

20. The Agent also provided brief details of two similar properties advertised on the Internet as follows: [ADDRESS] a two-bedroom bungalow advertised at £1,075.00 per calendar month, 10 viewings. [ADDRESS] a three-bedroom bungalow advertised at £1,250.00 per calendar month, 1 viewing.

21. The Agent stated that the Consumer Price Index had risen by 11.1%, that social housing was capped at 7% and that taking these into account the Landlord had set the rent increase at 8%. A copy of the covering letter of 25th November 2022 with the Notice of Rent Increase was provided which referred to rental values in

5 Bicester and Heyford for dwellings similar to [NAME] as starting at £975.00 per calendar month and rising to £1,300.00 per calendar month.

22. The [NAME] in its letter of 17th February 2023 to the Tenant referred to entertainment, medical, school and shopping facilities opening in the area in the past 12 months. DETERMINATION 23. The Tribunal determines a market rent for a property by reference to rental values generally and to the rental values for comparable properties in the locality in particular. The Tribunal does not take into account the present rent and the period of time for which that rent has been charged nor does it take into account the percentage increase which the proposed rent represents to the existing rent. By determining rental values for properties in the open market, i.e., by reference to what tenants are prepared to pay, the Tribunal is in effect able to take account of the various ways in which landlords and their agents may seek to assess rents by return on capital, refence to inflation, value per unit of area.

24. The Tribunal only has jurisdiction to determine the rent. The Tribunal cannot take into account the personal circumstances of either a tenant or landlord.

25. The Tribunal assesses a rent based on the condition of [NAME] as at the time of the determination. Therefore, it cannot take into account the period of time which a property might have been in disrepair prior to work being carried out by the Landlord. Equally, it cannot take into account work which the Landlord said it is intended to undertake or is scheduled to take place in the future. With regard to the floor coverings, curtains/blinds and white goods the Tribunal determines their value to the tenant.

26. The Tribunal considered the properties which the [NAME] submitted as being comparable to [NAME]. The Tribunal found that the valuation Report dated 2nd December 2021 prepared for [ADDRESS] was not helpful as it was for a property of a different type and age. The most comparable properties to [NAME] are the bungalows of the same age, style and condition. These tend to be poorly insulated in contrast to new build houses and bungalows and the redeveloped bungalows in Trenchard Circle.

27. The list of rents for similar three-bedroom bungalows owned by the Landlord provided a guide as to rental values generally in Upper Heyford but they have to be viewed with caution as they reflect a market that is not entirely open as the landlord has the monopoly over a significant number of properties.

28. The Tribunal noted the three-bedroom bungalow specifically identified on [ADDRESS] as being an appropriate comparable. However, based on the Agent’s statement, the asking rent indicates that it is in significantly better condition than [NAME]. The insulation in respect of the panels below the living room windows might also be better as a result of the upvc cladding, if not the asking rent might be found to be optimistic. 29. [NAME] appears to be in a poorer condition with a dated kitchen and the bathroom showing signs of wear. It also suffers from the formation of mould, whatever the cause, whether poor insulation or ill-fitting window frames. The

6 division of the open plan living room into two is a matter of individual preference and does not necessarily enhance the rental value. The failure to make good and remove the old boiler and the dilapidated garden sheds are a detriment.

30. The Tribunal was of the opinion that taking a market rent of £1,250.00 per calendar month would be appropriate for a similar 3 bedroom bungalow in good condition with central heating, double glazing, modern kitchen and bathroom with carpets and some white goods. However, a sum of £200.00 should be deducted to take account of the condition of [NAME] as described. The Tribunal determined that the Landlord might reasonably expect to let [NAME] on the open market for the rent of £1,050.00 under the present assured periodic tenancy.

31. The Tribunal determined that a market rent for [NAME] in its present condition is £1,050.00 per calendar month to take effect on 1st January 2023. Judge JR Morris Caution: The Tribunal inspected [NAME] for the purposes of reaching this decision. The inspection was not a structural survey and any comments about the condition of [NAME] in this statement must not be relied upon as a guide to the structural or other condition of [NAME]. APPENDIX - RIGHTS OF APPEAL 1. If a party wishes to appeal the 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.

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, [NAME] and the case number), state the grounds of appeal, and state the result the party making the application is seeking.