Tenant Entitled to Adjusted Fair Rent Based on Improvements and Market Conditions

OUTCOME: Allowed

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Case Reference

: BIR/00CT/F77/2024/0632

Property : 11 [ADDRESS] [POSTCODE]

Tenant

: [NAME]

Landlord : [APPELLANT] of Objection : 5th September 2024

Type of Application : Section 70 Rent Act 1977

Tribunal Members : [NAME]. [NAME]. [NAME]. [NAME]. FRICS

Date of Decision : 13th February 2025

_______________________________________________

DECISION

The sum of £709.50 per month will be registered as the fair rent with effect from 13th February 2025 being the date the Tribunal made the Decision. ____________________________________

FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

2

REASONS FOR THE DECISION

Background

1. On 31st October 2024, the Rent Officer registered a rent of £700.00 per calendar month, effective from 6th December 2024. Following an objection from the Landlord to the determination of a fair rent by the Rent Officer, the Tribunal has made a determination under the provisions of the Rent Act 1977.

Inspection

2. The Tribunal did not inspect the property but considered this case on the basis of the papers provided by the parties and having regard to its own knowledge, expertise and online research.

Evidence

3. The Tribunal has considered the written submissions provided by the Tenant and the Landlord. From the information provided it appears that the subject property comprises a semi-detached, 3-bedroom, double-glazed and centrally heated dwelling with gardens to front and rear together with off-road parking.

4. The Tribunal notes that the central heating, white goods and carpets & curtains have been provided by the Tenant.

5. The Tribunal further notes from the Tenant’s submissions that they have carried out extensive improvements including:-  Gas fire central heating plus fitted gas fire to the living room  Plastered and skimmed walls to the kitchen and installation of kitchen cupboards and worktops  Replaced internal doors, light switches and sockets  Installation of laminate flooring to the living room and bedroom 2  Replacment bathroom suite  Fitted mirrored wardrobes in Bedroom 2  Blocked paved driveway and parking for 2 vehicles  Installation of uPVC clad lean-to, and  Erection of 2 garden sheds, decking and patio.

6. The Tenant has not submitted any comparable evidence. The Landlord has provided extracts of comparable open market lettings ranging from £1,250 to £1,450 per calendar month including a confirmation email from Dixons Countrywide of the letting of [ADDRESS] on 25th November 2024 at £1,450 per calendar month.

3

Determination and Valuation

7. On consideration of the comparable evidence provided by the Landlords, that

forwarded by the Rent Officer and the Tribunal’s own expert knowledge of rental

values in the area, the Tribunal considers that the open market rent for the

property in a satisfactory condition would be in the region of £1,450 per month.

From this level of rent, the Tribunal has made adjustments in relation to the

following:

a) The condition of the property b) Improvements made by the Tenant as outlined in Para.5. above c) Curtains, carpets and white goods fitted by the Tenant. d) The Tenant’s liability to redecorate.

8. The Tribunal has also made an adjustment for scarcity using their own general

knowledge and experience. The Tribunal considers that in the wider geographical

area there is an imbalance of supply and demand impacting on rental values and

has, therefore, made a reduction of 15% for scarcity.

9. The full valuation is shown below: Per month

Market Rent

£1450

Less a) Items given under a) above

£200 b) Items given under b) above

£180 c) Items given under c) above

£80

d) Tenant’s internal decoration liability @ 5% £72.50

Less Scarcity @ 15%

£148.50 £681.00

£769.00

10. The Tribunal determines an uncapped fair rent of £769 per month on adopting scarcity at 15% of the amended rent following consideration of s70 (3) Rent Act 1977.

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Decision

11. The uncapped fair rent determined by the Tribunal, for the purposes of section 70, is therefore £769 per month however the maximum fair rent permitted by the Rent Acts (Maximum Fair Rent) Order 1999 is £709.50 per month, this therefore limits the fair rent to be registered. The calculation of the capped rent is shown on the decision form.

12. The rent to be registered is therefore £709.50 per calendar month with effect from 13th February 2025.

Chairman: [NAME]: 13th February 2025

APPEAL PROVISIONS

If either party is dissatisfied with this decision, they may apply for permission to appeal to the Upper Tribunal (Lands Chamber) on any point of law arising from this Decision. Prior to making such an appeal, an application must be made, in writing, to this Tribunal for permission to appeal. Any such application must be made within 28 days of the issue of this statement of reasons (regulation 52 (2) of The Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013) stating the grounds upon which it is intended to rely in the appeal.

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

BIR/00CT/F77/2024/0632

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were 11 [ADDRESS] [POSTCODE]

[NAME]. [NAME]. [NAME]. [NAME]. FRICS

Landlord [APPELLANT]

Tenant Mr [APPELLANT]

1. The fair rent is £709.50 Per month (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 13th February 2025

3. The amount for services is N/A Per -

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

N/A Per -

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 the maximum fair rent as prescribed by the Rent Acts (Maximum Fair Rent) Order 1999. The rent that would have otherwise been registered was £769.00 per month.

[NAME]. FRICS Date of decision 13th February 2025

6 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 392.1

PREVIOUS RPI FIGURE Y 358.3

X 392.1 Minus Y 358.3 = (A) 33.80

(A) 33.80 Divided by Y 358.3 = (B) 0.09433

First application for re-registration since 1 February 1999 - NO

If yes (B) plus 1.075 = (C)

If no (B) plus 1.05 = (C) 1.14433

Last registered rent* £620.00 Multiplied by (C) = £709.48 *(exclusive of any variable service charge)

Rounded up to nearest 50p = £709.50

Variable service charge NO If YES add amount for services

MAXIMUM FAIR RENT = £709.50 Per 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.