Tribunal Sets Fair Market Rent for Property

OUTCOME: Allowed

MR22 First-tier Tribunal – Property Chamber File Ref No. LON/00BB/MNR/2024/0709

Notice of the Tribunal Decision and Register of Rents under Assured Periodic Tenancies (Section 14 Determination or Section 22 Determination)

Housing Act 1988 Section 14

Address of Premises The Tribunal members were 61 [ADDRESS], [POSTCODE]

Mr [RESPONDENT] Mr [RESPONDENT]

Landlord Dr [RESPONDENT] 9 [ADDRESS], [POSTCODE]

Tenant Ms [APPELLANT]

1. The rent is: £ 1,805 Per Cal Month (excluding water rates and council tax but including any amounts in paras 3)

2. The date the decision takes effect is: 17 November 2024

3. The amount included for services is not applicable N/A Per

4. Date assured tenancy commenced 17 July 2023

5. Length of the term or rental period Monthly

6. Allocation of liability for repairs Landlord

7. Furniture provided by landlord or superior landlord None other than white goods.

8. Description of premises Small 2 storey, 2 bed, mid terrace house with private garden.

[NAME] of Decision 19 February 2025

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Case Reference

: LON/00BB/MNR/2024/0709

Property : 61 [ADDRESS], [POSTCODE]

Tenant

: Ms [APPELLANT]

Landlord : Dr [RESPONDENT] of Application : 5 November 2024

Type of Application : Determination of a Market Rent sections 13 & 14 of the Housing Act 1988

Tribunal Members : Mr [NAME]

Mr [NAME] of Summary Reasons

: 18 March 2025

_______________________________________________

DECISION

The Tribunal determines a rent of £1,805 per calendar month with effect from 17 November 2024. ____________________________________ © CROWN COPYRIGHT 2025 FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

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SUMMARY REASONS

Background 1. On 27 September 2024 the Landlord served a notice under Section 13(2) of the Housing Act 1988 which proposed a new rent of £1,900 in place of the existing rent of £1,750 per month to take effect from 17 November 2024.

2. On 5 November 2024 under Section 13(4)(a) of the Housing Act 1988, the Tenant referred the Landlord’s notice proposing a new rent to the Tribunal for determination of a market rent. The Tenant’s referral was received by the Tribunal on the same day.

Inspection 3. The Tribunal has carried out an inspection of the property on 19 February 2025.

Evidence 4. The Tribunal has consideration of the written submissions provided by the Tenant and the Landlord.

Determination and Valuation 5. Having consideration of the comparable evidence proved by the parties and of our own expert, general knowledge of rental values in the area, we consider that the open market rent for the property in good tenantable condition would be in the region of £1,850 per calendar month. From this level of rent we have made a deduction of 2.5% to account for the condition of the property, and the lack of a radiator in the kitchen.

6. The full valuation is shown below:

7. The Tribunal determines a rent of £1,805 per calendar month.

Decision 8. The Tribunal therefore determined that the rent at which the subject property might reasonably be expected to be let in the open market by a willing Landlord under an assured tenancy was £1,805 per calendar month.

3 9. The Tribunal directs the new rent of £1,805 per month to take effect on 17 November 2024; this being the date as set out in the Landlord’s Notice of Increase.

Chairman: [NAME]: 18 March 2025

APPEAL PROVISIONS

These summary reasons are provided to give the parties an indication as to how the Tribunal made its decision. If either party wishes to appeal this decision, they should first make a request for full reasons and the details of how to appeal will be set out in the full reasons. Any request for full reasons should be made within a month. Any subsequent application for permission to appeal should be made on Form RP PTA.

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : LON/00BB/MNR/2024/0709 Property : 61 [ADDRESS], [POSTCODE] Tenant : Ms [APPELLANT] Landlord : Dr [APPELLANT] of application : 5 November 2024 Type of application : Application for determination of market rent following a Notice of Increase served pursuant to Section 13 of the Housing Act 1988. Tribunal member(s) :

[NAME] [NAME] : 10 [ADDRESS], [POSTCODE] Date of decision : 19 February 2025 Date of Summary Reasons : 18 March 2025 Date of reasons : 20 May 2025

REASONS FOR DECISION

© CROWN COPYRIGHT 2025

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Background 1. The tenant lives in the property under a monthly, periodic assured tenancy. The landlord served on the tenant a Notice of Increase, dated 27 September 2024, proposing to increase the rent at the property from £1,750 per month to £1,900 per month with effect from 17 November 2024.

2. On 5 November 2024 the Tribunal received an application from the tenant referring the landlord’s Notice of Increase to the tribunal, challenging the increase and seeking a determination of the market rent.

3. The Tribunal issued directions on 19 December 2024, which invited the parties to provide a reply form and make any other submissions they wished to make. Both parties provided a reply form and further submissions.

4. The tenant indicated, in their reply form, that they wished the Tribunal to inspect the property, but neither party indicated that they required a hearing. We therefore arranged for an inspection of the property, to be followed by a determination on the basis of the papers provided.

5. We inspected the property on 19 February 2025, alongside both the tenant and the landlord.

The Inspection

6. The subject property is a period, 2 storey, 2 bed mid-terrace house under a pitched tiled roof in Plaistow. The ground floor of the property offers a good size living area, a galley kitchen (which does not have a radiator) and a bathroom beyond. That bathroom is very cold, presumably as a result of its not being insulated properly (though we were unable to ascertain the cause visually on inspection). We observed that there was black spot mould on the bathroom ceiling which appeared consistent with condensation.

7. Upstairs, the property offers 2 double bedrooms which are in a good condition. To the rear, the property has a garden, accessed via a basic ‘lean to’ type area created by means of plastic sheeting in the infill between the kitchen and bathroom areas and the neighbouring property. Part of the garden fence has fallen down on the left hand side (as looked at from the house) and there is therefore no real division between the subject garden and the neighbouring one.

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8. The defects we have noted above aside, the property is generally in a good, modern condition.

The law

9. The way in which the Tribunal is to determine a market rent in this circumstance is set out in Section 14 of the Housing Act 1988. That section is too lengthy to quote in its entirety in these reasons. In brief, the tribunal is to determine the rent at which the property might reasonably be expected to let in the open market, on the proposed rental increase date, by a willing landlord under an assured tenancy, subject to disregards in relation to the nature of the tenancy (i.e. it being granted to a “sitting tenant”) and any increase or reduction in the value due to the tenant’s carrying out improvements which they were not obliged to carry out by the lease or their failure to comply with the terms of the tenancy.

10. Whilst not directly relevant to our reasons, we note for completeness that – in requesting these present reasons – the landlord indicated that he would install a radiator in the kitchen and asked, essentially, how that would be reflected. This is a misunderstanding of the Tribunal’s role. The Tribunal’s jurisdiction in this matter is simply to determine a rent in the manner set out in sections 13 and 14 of the Housing Act 1988, given the condition of the property as it was on the proposed date of increase (in this case 17 November 2024), as we have done.

Valuation

11. The landlord provided no comparable evidence for us to consider. What we were provided with extended to a completed reply form with accompanying (brief) covering letter, a copy of the tenancy agreement for the property and a copy of 4 letters sent by the landlord to the tenant. Two of those letters regard an apparent attempt to vary the amount of the notice of increase to £1,875 per calendar month (without, apparently, actually issuing a new notice to reflect that), and the third is a demand for payment of the new rent. The remaining letter is one sent on 9 October 2024 in which the landlord avers that rent in the area “on average is £2000 plus per mon h” [sic] and refers to (unevidenced, though credible) increases in Office for National Statistics (ONS) indices regarding rents.

12. The tenant provided, alongside their reply form, details of the asking rent for a 2 bed property on [ADDRESS] (at £1,750pcm), as well as further comment in reply to the landlord concerning ONS data, pointing out

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there was a lower average increase in Newham specifically than the wider increases for London and the UK as a whole set out by the landlord. The tenant also provided copies of letters she had sent to the landlord, including one dated 1 October 2024 in which she said that she believed average rental values for similar properties in the area were around the £1,750-£1,800pcm – and therefore proposed a revised rent of £1,800pcm.

13. We are grateful for the evidence provided by the parties, however, as is by no means unusual none of it was of particular assistance to us in the valuation of the property. Relevantly to the valuation itself, the landlord had only provided brief comments in a letter, referring to their belief of the average rental value and ONS data (which was, as the tenant pointed out, in any case not a complete picture of that data).

14. ONS data and indeed any index can only provide a general picture of market sentiment. That being said, we are reluctant to say that indexation might never play a role in a rental valuation exercise, particularly concerning unusual properties or ones located in areas where there is a very limited rental market - but that isn’t the case here, and we find as a fact that there is an active transactional market for similar properties to the subject in the area.

Accordingly, there is no need to rely upon indexation as a means of establishing a market rental value (as it can be discerned directly from actual values in the market), and we applied very little weight to the ONS data provided.

15. As regards the asking rent put forward by the tenant for the property on [ADDRESS], we had consideration of it but asking rents in general carry very little weight. In addition, the photographs provided in the particulars provided were limited and it is located a little way away from the subject property on the other side of the Greenway.

16. Accordingly, we had regard both to the submissions of the parties and our own expert knowledge of general rental levels in the area. We determined that the property might be expected to let for a figure of around £1,850 per calendar month, were it let on the open market in the condition and on the terms considered usual for such a letting.

17. From that level, we deducted 2.5% to account for the defects at the property (as set out in the inspection section above) and the absence of a radiator in the kitchen. We note for completeness that this does include some consideration of the black spot mould in the bathroom at the property. Whilst this appeared to us to be caused by condensation, and therefore at least partially the responsibility of the tenant (and we did

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note on inspection the trickle vent in the bathroom window was in the closed position), the fact is that room is very cold. That does not assist of itself in preventing the formation of mould, and also means a prudent hypothetical tenant would be concerned about the extent of ventilation which is clearly required to prevent such mould in an already cold room.

18. It is worth noting for completeness that the tenant pointed out some of the white goods had not been provided by the landlord, but instead had been left by the previous tenant. This is of no import to our decision, as they were provided with the property to the tenant regardless of whether the landlord had actually paid for them or not.

19. We therefore arrived at a rent of £1,805 per calendar month - as shown in the valuation below:

Effective Date 20. As set out in Section 14(7) of the Housing Act 1988, the effective date of a Tribunal determination under that section is the rent increase date that was provided in the landlord’s Notice of Increase – unless it appears to the Tribunal that this would cause the tenant undue hardship. In those circumstances, the Tribunal may adopt a later effective date for its determination, being not later than the date on which the determination is made.

21. The tenant did not make any representations as to hardship and accordingly, we determined that the rent would take effect from 17 November 2024 – the date specified in the landlord’s notice of increase.

Decision 22. Pursuant to the considerations above, the Tribunal determined a rent of £1,805 per calendar month in this matter, such rent to take effect from 17 November 2024.

Valuer Chairman: [NAME]: 20 May 2025

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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 Rent Act 1977, the Housing Act 1988 or the Local Government and Housing Act 1989, this can only be on a point of law. If the Tribunal refuses to grant permission to appeal, a further application for permission may be made to the Upper Tribunal (Lands Chamber).