Tribunal Sets Fair Rent Cap Under Rent Act 1977

OUTCOME: Allowed

First-tier Tribunal – Property Chamber File Ref No. LON/00BK/F77/2021/0105

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were I1 Albany, Piccadilly, London, [POSTCODE]

Judge Dutton Mrs S F Redmond BSc (Econ) MRICS

Landlord [APPELLANT]

Tenant Mr [APPELLANT]

1. The fair rent is £33,064.00 Per Annum (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 18 June 2021

3. The amount for services is £6,877.62 Per annum

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 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

8. For information only:

(b) The fair rent to be registered is not limited by the Rent Acts (Maximum Fair Rent) Order 1999, because it is below the maximum fair rent of £38,911 per annum including £6,877.62 per annum for services as prescribed by the Order.

Chairman Judge Dutton Date of decision 18 June 2021

MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 301.1

PREVIOUS RPI FIGURE Y 261.1

X 301.1 Minus Y 261.1 = (A) 40

(A) 40 Divided by Y 261.1 = (B) 0.153198

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

If yes (B) plus 1.075 = (C)

If no (B) plus 1.05 = (C) 1.203198

Last registered rent* £32,339.50 Multiplied by (C) = £38,910.82 *(exclusive of any variable service charge)

Rounded up to nearest 50p = £38,911

Variable service charge NO If YES add amount for services

MAXIMUM FAIR RENT = £38,911 Per annum

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.