Tribunal Sets Fair Rent at £306.50 Per Week

OUTCOME: Dismissed

FR27 Tribunal’s Fair Rent Decision

(5.18) (to be completed by the Tribunal and given to the Case Officer)

Case Number: LON/00AM/F77/2024/0616

[ADDRESS], [POSTCODE]

Tribunal Judge [NAME_1]

Landlord [COMPANY_2]

Tenant [NAME_3]

1. The fair rent is £306.50 Per week (excluding water rates but including any council tax payable by the tenant to the landlord and any amounts in paras 3&4)

2. The effective date is 13 December 2024

3. The amount for services is not applicable

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

not applicable

5. The rent is not to be registered as variable

6. The capping provisions of the Rent Acts (Maximum Fair Rent) Order 1999 apply.

7. Details (other than rent) where different from Rent Register entry

None.

8. For information only: (complete (a) or (b))

(a) 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 otherwise have been registered was £442 per week.

Signed by Judge Tribunal Judge Mohabir Date of decision 13 December 2024

FR27 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 390.7

PREVIOUS RPI FIGURE Y 283.0

X 390.7 Minus Y 283.0 = (A) 107.7

(A) 107.7 Divided by Y 283.o = (B) 0.380565

First application for re-registration since 1 February 1999 NO

If yes (B) plus 1.075 = (C)

If no (B) plus 1.05 = (C) 1.430565

Last registered rent* £214.00 Multiplied by (C) = 306.14 *(exclusive of any variable service charge)

Rounded up to nearest 50p = 306.50

Variable service charge NO If YES add amount for services

MAXIMUM FAIR RENT = 306.50 Per 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.

Case Reference:

LON/00AM/F77/2024/0616

Property:

43 [ADDRESS], [POSTCODE]

Tenant: `

[NAME_3]

Landlord:

[COMPANY_2]

Date of Objection:

Type of Application: Section 70, Rent Act 1977

Tribunal:

Judge I [NAME_1]

Date of Extended Reasons

: 13 December 2024

_______________________________________________

DECISION

The sum of £306.50 per week will be registered as the fair rent with effect from 13 December 2024 being the date the Tribunal made the Decision. ____________________________________

© CROWN COPYRIGHT EXTENDED REASONS

FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

Background 1. 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 (“the Act”).

2. By an application dated 14 May 2024, the landlord applied to register a fair rent in respect of 43 [ADDRESS], [POSTCODE] (“the property”). The tenant is a secure tenant of the property under the Housing Act 1985 pursuant to a tenant granted to her on 5 January 1987 by the landlord.

3. The landlord sought to have a faire rent of £10,530 per annum registered. The fair rent had previously been registered on 8 October 2018 in the sum of £213.50 per week (£9,849.84 per annum) following an appeal to the Tribunal.

4. On 14 May 2024, the Rent Officer registered a fair rent of £303 per week commencing from 8 July 2024, which the tenant objected to and the matter was referred to the Tribunal for a fresh determination.

Hearing 5. An oral hearing took place on 13 December 2024. The tenant appeared in person. The landlord did not attend and was not represented.

6. Prior to the hearing, the tenant had filed written representations in relation to the fair rent together with a number of comparable properties of the passing rent being paid to other social landlords. No written representations had been filed or served by the landlord.

7. At the hearing, the tenant maintained that the Rent Officer’s capping calculation were wrong because it should have been based on the rents being paid in respect of other properties in the locality to other social landlords, as demonstrated in her comparables.

8. The tenant also complained about the incorrect process by which the landlord had internally applying the rent increases.

9. The Tribunal explained to the tenant that the landlord, as a social landlord, only charged her a lesser rent increase based on its own internal annual indexation. The assessment of the fair rent under section 70 of the Act was an entirely separate exercise by the Tribunal, which would invariably result in a higher rent being determined. Therefore, the comparables relied on by the tenant were not relevant and did not provide the Tribunal with any assistance in determining the fair rent. However, in reality, her landlord would only seek to recover the lower rent charged by it. Indeed, the tenant confirmed that the rent she was currently paying is £189.42 per week.

Inspection 10. The Tribunal later inspected the property on 13 December 2024. It is a Victorian mid-terraced house of brick construction under a slate roof, situation on a quiet residential road with permit parking. All windows are single glassed timber sash with some timber casement to the rear. The windows are all in very poor condition with bad rot in many places.

The accommodation comprises of: Ground floor, a kitchen diner, living room, toilet, and living room/bedroom. On the first floor there are three bedrooms and a bath and toilet. All white goods, furniture, flooring, curtains are provided by the tenant.

Determination and Valuation 11. Having consideration of our own expert, general knowledge of rental values in the area of Hackney, we consider that the open market rent for the property in its current condition would be in the region of £850.00 per week.

12. From this level of rent we have made global adjustments in relation to:

For the absence of kitchen units, tenant’s floor coverings, curtains, white goods, the tenant’s internal decoration obligation under the terms of the tenancy and the absence of double glazing and the external disrepair in particular to the window frames totalling 35%.

13. The Tribunal has also made an adjustment for scarcity.

14. The full valuation is shown below:

per week Market Rent

£850.00

Less

Deductions above

) No kitchen units

) Tenant’s floor coverings and white goods )

40% Tenant’s decorating obligation

) No double glazing

) Disrepair to the windows

)

Adjusted rent

£552.50

Less Scarcity

approx. 20%

£110.50

£442.00

15. The Tribunal determines a rent of £442.00 per week.

Decision 16. However, the rent has been capped under the provisions of the Rent Acts (Maximum Fair Rents) Order 1999 as it is above MFR of £306.50 per week.

Tribunal Judge: Mr I Mohabir

Date: 13 December 2024

APPEAL PROVISIONS

These extended reasons are provided to give the parties an indication as to how the Tribunal made its decision. Any application for permission to appeal should be made on Form RP PTA.