Tribunal Caps Fair Rent at £265 per Week

OUTCOME: Allowed

FR27 First-tier Tribunal – Property Chamber File Ref No. LON/00AJ/F77/2024/0243

Notice of the Tribunal [NAME] 1977 Schedule 11

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

Mrs [APPELLANT]

Landlord [RESPONDENT]

Tenant Mr R [APPELLANT] & [APPELLANT]

1. The fair [NAME] is £265 Per week (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 9 October 2024

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 [NAME] allowance is

Per

not applicable

5. The [NAME] is not to be registered as variable.

6. The capping provisions of the [NAME] ([NAME]) Order 1999 apply (please see calculation overleaf).

7. Details (other than [NAME]) where different from [NAME] entry

8. For information only:

(a) The fair [NAME] to be registered is the maximum fair [NAME] as prescribed by the [NAME] ([NAME]) Order 1999. The [NAME] that would otherwise have been registered was £380 per week.

Chairman E [NAME] of decision 9 October 2024

FR27 [NAME] FIGURE X 389.9

PREVIOUS RPI FIGURE Y 258.6

X 389.9 Minus Y 258.6 = (A) 131.3

(A) 131.3 Divided by Y 258.6 = (B) 0.507734

First application for re-registration since 1 February 1999 NO

If yes (B) plus 1.075 = (C)

If no (B) plus 1.05 = (C) 1.557734

Last registered [NAME]* £170 Multiplied by (C) = £264.81 *(exclusive of any variable service charge)

Rounded up to nearest 50p = £265

Variable service charge NO If YES add amount for services

[NAME] = £265 Per week

Explanatory Note

1. The calculation of the maximum fair [NAME], in accordance with the formula contained in the Order, is set out above.

2. In summary, the formula provides for the maximum fair [NAME] to be calculated by:

(a) increasing the previous registered [NAME] 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 [NAME] determination was made.

4. The process differs where the tenancy agreement contains a variable service charge and the [NAME] is to be registered as variable under section 71(4) of the [NAME] 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 [NAME].

Case Reference : LON/00AJ/F77/2024/0243

P:PAPERREMOTE

Property : 121 [ADDRESS] [POSTCODE]

Applicant: [redacted]

Respondent: [redacted] : 17 June 2024

Type of Application : Determination of the registered [NAME] under Section 70 [NAME] 1977

Tribunal

: Mrs [NAME] and venue of : 9 October 2024 Hearing remote on the papers

_______________________________________________

DECISION ____________________________________

This has been a hearing on the papers which has not been objected to by the parties. A face to face hearing was not held because, no-one requested the same and I determined that the matter could be dealt with on the papers. The documents that I was referred to were in an electronic bundle the contents of which I have recorded. The registered [NAME] with effect from 9 October 2024 is £265 per week.

© CROWN COPYRIGHT

FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

Background

1. On 16 April 2024 the landlord applied to the [NAME] officer for registration of a fair [NAME] of £233.62 per week for the above property.

2. The registered [NAME] at the date of the application was £170 per week which had been registered by the [NAME] officer on 7 July 2015 with effect from the same date.

3. On 6 June 2024, the [NAME] officer registered a fair [NAME] of £233.65 per week with effect from the same date.

4. The tenant objected to the registered [NAME] on 17 June 2024.

5. The tribunal issued Directions on 15 August 2024. No representations were received from either the landlord or the tenant, other than the grounds for the objection.

The Evidence

6. The property is an end terrace house comprising two living rooms and kitchen on the ground floor and three bedrooms and bathroom/wc on the first floor. The house is centrally heated. 7. The tenant who has lived in the house since December 1995, has objected to the increase on the grounds that such a large increase is unaffordable.

The Law

8. When determining a fair [NAME] the tribunal, in accordance with section 70 of the [NAME] 1977, must have regard to all the circumstances including the age, location and state of repair of the property. It also must disregard the effect of any relevant tenant’s improvements and the effect of any disrepair or any other defect attributable to the tenant or any predecessor in title under the regulated tenancy, on the rental value of the property. The Tribunal is unable to take into account the tenant’s personal circumstances when assessing the fair [NAME].

9. In [COMPANY] v Chairman of the Greater Manchester etc Committee (1995) 28 HLR 107 and [NAME] v [NAME] (1999) QB 92 the Court of appeal emphasised:

That ordinarily a fair [NAME] is the market [NAME] for the property discounted for scarcity i.e. that element, if any, of the market [NAME], that is attributable to there being a significant shortage of similar properties

in the wider locality available for letting on similar terms to that of a regulated tenancy, and

That for the purposes of determining the market [NAME], assured tenancy market rents are usually appropriate comparables; adjusted as necessary to reflect any relevant differences between the comparables and the subject property.

Valuation 10. In the first instance I determined what [NAME] the landlord could reasonably be expected to obtain for the property in the open market if it were let today in the condition and on the terms considered usual for such an open market letting. I relied on my own general knowledge of rents within Southall and concluded that if the house were in the condition usually found on the open market it would let for £600 per week.

11. However, it was first necessary to adjust the hypothetical [NAME] of £600 per week to allow for the differences between the terms and condition considered usual for such a letting and the condition of the actual property at the valuation date, ignoring any tenant’s improvements, (disregarding the effect of any disrepair or other defect attributable to the tenant or any predecessor in title). I determined that the hypothetical [NAME] should be reduced by £120 to reflect the lack of modernisation, carpets curtains and white goods and difference in terms and conditions.

12. This leaves an adjusted market [NAME] for the subject property of £480 per week. I am of the opinion that there is substantial scarcity for similar properties in Greater London and therefore made a deduction of approximately 20% from the adjusted market [NAME] to reflect this element. The uncapped fair [NAME] is £380 per week.

Decision

13. The uncapped fair [NAME] initially determined for the purposes of section 70, is above the maximum fair [NAME] of £265 per week calculated under the [NAME] ([NAME]) Order 1999. Therefore, the [NAME] will be capped under the provisions of the Order.

14. Accordingly, the sum of £265 per week will be registered as the fair [NAME] with effect from 9 October 2024 being the date of my decision.

15. The registered [NAME] sets a ceiling on the amount of [NAME] which the landlord may charge. However, housing associations are also subject to other rules which may limit what is payable to an amount less than the fair [NAME] determined above.

Chairman: [NAME]: 9 October 2024

ANNEX - 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 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 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. 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. 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 [NAME] 1977, the Housing Act 1988 or the Local Government and Housing Act 1989, this can only be on a point of law. 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).