Tribunal Sets Capped Fair Rent for Tenant

OUTCOME: Allowed

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Case Reference

: BIR/00CN/F77/2024/0617

Property : 44 [ADDRESS] [POSTCODE]

Tenant

: [NAME]

Landlord : [APPELLANT] of Objection : 30 September 2024

Type of Application : Section 70 Rent Act 1977

Tribunal Members : [NAME] Regional Surveyor

Judge David R Salter

Date of Decision : 19 February 2025

_______________________________________________

DECISION

The sum of £117.00 per week will be registered as the fair rent with effect from 19 February 2025 being the date the Tribunal made the Decision.

The Tenant should note, however, that the Landlord indicated that it does not intend to charge more than £82.71 per week, see below. ____________________________________

FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

2 REASONS FOR THE DECISION

Background

1. The Rent Officer registered a rental of £98.00 per week on 19 September 2024, effective from the same date. Following an objection from the Tenant 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 Rent Officer and having regard to its own knowledge, expertise and online research.

Evidence

3. No written submissions were provided by the Tenant in response to the Tribunal’s Directions. The submissions made by the Landlord confirmed that the Property was a house with 2 bedrooms which benefits from central heating and double glazing. In addition, the Landlord confirmed that the rental it sought was £82.71 per week and further that it would not be enforcing the rent determined by the Rent Officer. From online resources, the Tribunal was able to determine that the Property was a mid-terraced house.

Determination and Valuation

4. On consideration of the evidence 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 £200.00 per week. From this level of rent, the Tribunal has made adjustments in relation to the following:

a) Curtains, carpets and white goods fitted by the Tenant. b) The Tenant’s liability to redecorate.

5. The Tribunal has also made an adjustment for scarcity using its 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, has made a reduction of 15% for scarcity.

6. The full valuation is shown below:

Per week

Market Rent

£200.00

3 Less a) Items given under a) above

£20.00

b) Tenant’s internal decoration liability @ 5% £10.00 £30.00

£170.00

Less Scarcity @ 15%

£25.50

Fair Rent (Uncapped)

£144.50

Decision

7. The uncapped fair rent determined by the Tribunal, for the purposes of section 70, is therefore £144.50 per week however the maximum fair rent permitted by the Rent Acts (Maximum Fair Rent) Order 1999 is £117.00, this therefore limits the fair rent to be registered. The calculation of the capped rent is shown on the decision form.

8. The rent to be registered is therefore £117.00 per week with effect from 13th February 2025.

9. The Tenant should note, however, that the Landlord indicated that it does not intend to charge more than £82.71 per week.

Chairman: [NAME]: 13 March 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.

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

BIR/00CN/F77/2024/0617

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were: 44 [ADDRESS] [POSTCODE]

[NAME] Judge DR Salter

Landlord [APPELLANT]

Tenant J [APPELLANT]

1. The fair rent is £117.00 Per week (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 19 February 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 iis 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 as prescribed by the Rent Acts (Maximum Fair Rent) Order 1999. The rent that would have otherwise been registered was £144.00 per week.

[NAME] of decision 19 February 2025

5 MAXIMUM FAIR RENT CALCULATION LATEST RPI FIGURE (x) 392.1 PREVIOUS RPI FIGURE (y) 317.7

x 392.1 minus y 317.7 equals (A) 74.4 (A) 74.4 divided by y 317.7 equals (B) 0.23418319 First application for re-registration since 1 February 1999 enter yes or no in box no If yes plus 1.075, if no plus 1.05 1.05 equals C 1.28418319 Last Registered Rent £ 91.00 multiplied by C £116.86 Round up to nearest 50p £ 117.00 Variable service charge Yes/No no If yes, add amount for services Maximum Fair Rent £ 117.00 per week

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.