Tribunal Sets Fair Rent for Plymouth Property

OUTCOME: Allowed

FR27 First-tier Tribunal – Property Chamber File Ref No. HAV/00HG/F77/2024/0610

Notice of the Tribunal Decision

Rent Act 1977, Schedule 11

Address of Premises The Tribunal members were 134 [ADDRESS] [POSTCODE]

[NAME] Mr [RESPONDENT] Mr [APPELLANT] I [APPELLANT]

Landlord Mr [APPELLANT]

Tenant Mrs [APPELLANT]

1. The fair rent is £685.00 Per Calendar Month (To exclude Water Rates and Council Tax, but to include any amounts in paras. 3 and 4).

2. The effective date is 17 December 2024

3. The amount for services is n/a Per n/a

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

n/a Per n/a

5. The rent is 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 the Rent Register entry

8. For information only:

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 £924.00 per Calendar Month prescribed by the Order.

[NAME] [NAME] of decision 17 December 2024

FR27 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 390.7

PREVIOUS RPI FIGURE Y 285.0

X 390.7 Minus Y 285.0 = (A) 105.7

(A) 105.7 Divided by Y 285.0 = (B) 0.37088

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

If yes (B) plus 1.075 = (C)

If no (B) plus 1.05 = (C) 1.42088

Last registered rent* £650.00p Multiplied by (C) = £923.57p *(exclusive of any variable service charge)

Rounded up to nearest 50p = £924.00p

Variable service charge YES / NO If YES add amount for services

MAXIMUM FAIR RENT = £924.00 Per Calendar Month

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.

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

Case reference : HAV/00HG/F77/2024/0610

Property : 134 [ADDRESS], [POSTCODE] Applicant Landlords : Mr [COUNSEL] and Mrs [COUNSEL] E [COUNSEL] : None

Respondent Tenant : Mrs [COUNSEL] : Ms [COUNSEL] of application : Determination of a Fair Rent Section 70, Rent Act 1977

Tribunal member(s) : [NAME] [NAME] Mr [NAME] of inspection : None, Determination on Papers

Date of decision : 17 December 2024

DECISION

© CROWN COPYRIGHT 2024

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Decision of the Tribunal On 17 December 2024 the Tribunal determined a Fair Rent of £685 (Six Hundred and Eighty-Five Pounds) Per Calendar Month to take effect from 17 December 2024. Background 1. On 11 September 2024 the Landlords (Mr [NAME] and Mrs [NAME]) submitted their Application for Registration of Fair Rent (‘RR1’) to the Rent Officer to register a fair rent of £850 per calendar month for the property, 134 [ADDRESS], [POSTCODE] (‘the property’).

2. This was an application to re-register the fair rent from its previous registration for the property on 4 February 2019 of £650 per calendar month, effective from 4 February 2019.

3. A new rent of £690.00 per calendar month was registered by the Rent Officer, effective from 18 October 2024. The uncapped rent was not given in the Rent Register.

4. In an email dated 23 October 2024 to the Valuation Office Agency (‘VOA’) the Landlords, [NAME] [NAME], gave their objection to the new rent registered and the matter was referred to the First-Tier Tribunal Property Chamber (Residential Property), formerly a Rent Assessment Committee.

5. The Tribunal issued Directions dated 5 November 2024. The Tribunal does not consider it necessary and proportionate in cases of this nature neither to undertake an inspection, nor to hold a Tribunal hearing unless either are specifically requested by either party or a particular point arises which merits such an inspection and/or hearing.

6. The Tribunal in its Directions informed the parties that, unless either party objected, the Tribunal intended to determine the rent on the papers (written representations), paragraph 5.

7. Similarly, the parties were informed the Tribunal will not inspect the property but will seek to view it on the internet; and goes on to say if it considers it necessary, it may carry out an external inspection, paragraph 6.

8. The parties were directed to complete and return their Fair Rent Appeal Statement (‘Statement’) to form their statement of case, within specific time limits, paragraphs 8 – 12 inclusive. The Statement provides for photographs to be attached, to assist the Tribunal to understand the case and to help the parties to present the issues.

9. Both parties submitted a Statement in accordance with the Directions. In broad terms, whereas each Statement includes a description of the property, neither included a copy of the tenancy agreement, nor a floor plan, nor any photographs. The Property 10. From the information provided in the Papers and [ADDRESS], 134

HAV/00HG/F77/2024/0610 [ADDRESS], Plymouth, is a late Victorian/early Edwardian terrace house, over two floors plus a basement.

11. Plymouth is a city port in south-west England; approximately 35 miles south-west of Exeter. [ADDRESS] is south of the A38 (the Devon Expressway), in the south-east of the city and to the west of the River Plym.

12. Under ‘Locality and amenity details’ from the Rent Service, it says ‘…approx. 2 miles from city centre. Within walking distance from local shops and on local bus route.’ 13. In the RR1 dated 11 September 2024 the property is described as ‘Terraced House – 2 Storey + Basement. The number and type of room(s) is listed as: 4 Bedrooms, 2 Reception Rooms, Kitchen/Diner, Bathroom, Shower Room + 2 Toilets, Basement.

14. In the Rent Register, registered on 18 October 2024, under ‘Premises’, the property is described: Basement – 1 WC, 1 Store/s; Ground – 2 Room(s), 1 Kitchen-Diner, 1 Bath/Shower-Room; and First – 4 Room(s), 1 Bath/Shower-Room, 1 WC.

15. In addition, there is a back garden. The Tenancy Agreement 16. Whereas a copy of the tenancy agreement has not been provided by either party, the ‘Tenancy Details’ from the Rent Service confirm it commenced 1 October 1987. The Landlord is responsible for all repairs and decorations, subject to section 11, Landlord and Tenant Act 1985.

17. The Tenant is responsible for internal decorations and payment of Council Tax and any Other rates demanded. Submissions – Fair Rent Appeal Statements 18. It is not the Tribunal’s intention to give an analysis of all the evidence listed, but to outline the overall valuation approaches of the parties, to show that all aspects have been considered.

19. On behalf of the Applicants, Mr [NAME] submitted his Statement, compliant with the Directions and copied the same to the Tenant’s representative the same day, 7 November 2024.

20. In his Statement, Mr [NAME] says both double glazing and a gas water heater have been provided by the landlords. In his submission, there are neither Improvements nor Service Charges for the Tribunal to consider.

21. Under ‘Condition of the property – including; a) Disrepairs/Defects and b) Age and Condition of Bathroom and Kitchen fittings’ Mr [NAME] gives replies to points raised by Ms [NAME] in her email to the VOA dated 2 October 2024. The Tribunal outlines the points Mr [NAME] makes below. • ‘…we have always dealt with repairs etc. when informed by Mrs [NAME]. We have repaired the leaking roof over the upstairs toilet,’ which he goes on to say is not easy to a building of three storeys.

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• An electrician has been sent to fix the faulty light switch in the dining room. • Mr [NAME] refers to having spent over £20,000 since acquiring the property in 2009, which includes: rebuilding the chimney; fully decorating the house front and back; the replacement of a window; and the provision and fitting of a new back garden gate. • In respect of damp, Mr [NAME] says ‘…we have never been made aware of any damp by Mrs [NAME], only her comment on the inspection day to Ms [NAME].’ From the information provided, Ms [NAME] of the Rent Service carried out her inspection of the property on 17 October 2024.

22. Under ‘Any Other Comments’, Mr [NAME] says ‘We believe there is a plentiful supply of buses and a train station 1.3 miles from the property.’ 23. Mr [NAME] does not provide his assessment of the rental value of the property but says ‘…I have looked on Rightmove and can only find one two bed, one bathroom house in the whole of Plymouth for less than £900 pcm and a handful for less than £1,000 pcm.’ 24. Mr [NAME] makes the following points, in outline. • The property has eight rooms, two bathrooms and two WCs. • Most of the houses in the area are Student HMOs, where it is difficult to find a room for £500 pcm. This house would probably be a ‘six bed let.’ • A lot of houses have been converted into two, two-bedroom flats with rents of £1,000 pcm plus for each. • The property is a large three-storey house in a decent class area of Plymouth.

25. Mr [NAME] is, in effect, silent on whether the Maximum Fair Rent Order should not apply but says ‘…we could find no two bedroomed houses for less than £900 pcm. [ADDRESS] is a four bedroomed house.’ 26. In her Statement, the Respondent Tenant’s representative, Ms [COUNSEL], in effect confirms under Features: (1) the landlord has provided double glazing and a gas water heater; and (2) the tenant has provided the carpets and curtains and the white goods.

27. The accommodation is confirmed as outlined in paragraph 14 above and there is a private garden.

28. Improvements, Ms [NAME] gives outline details, as follows. • The gas fires in the reception rooms were condemned in November 2024 and the chimney has now been deemed unsuitable for a gas fire. • The reception room has been redecorated due to the blackening

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from the backflow from the chimney. The curtains have been replaced too. Costs to date are over £1,600. • There is no heating in the second reception room. The gas fire, having been condemned, was removed by the Tenant. • The gas burner hob has been replaced at the Tenant’s expense, this year (2024).

29. Under ‘Condition of the property – including; a) Disrepairs/Defects and b) Age and Condition of Bathroom and Kitchen fittings’, Ms [NAME] makes the following points, in outline. • The basement ceiling is missing in parts. • The ceiling in the first floor WC has not been repaired since the roof repairs were carried out. • The kitchen fittings date back to the late 1970’s. • The bathroom fittings are original from when the tenant moved in over 58 years ago. • There is no central heating. • The back garden gate does not fit properly and since replacement, it has rotted.

30. Under ‘Any Other Comments’ Ms [NAME] makes various points in reply to Mr [NAME] assessment of the rental value of the property. The Tribunal outlines those points which it has not previously referred to in this Decision and are to be considered in reaching its determination of this valuation. • The tenant could understand a request for an increase in rent to reflect the increase of 7.4% in the local market. • The light switch has been repaired by the landlord in the second reception room.

31. Ms [RESPONDENT] is silent on the following: her assessment of the rental value of the property; whether the Maximum Fair Rent Order should not apply; and whether the demand for such properties exceeds supply.

32. The Tribunal has been provided with a copy of Mr [NAME] email to the First-tier Tribunal dated 3 December 2024 and copied to Ms [NAME], same day. Mr [NAME] email of 3 December 2024 is in reply to some of the points given by Ms [NAME] in her Statement to the Tribunal.

33. Whereas the Tribunal’s Directions do not give an automatic right of reply, the parties were informed of the process to be followed for Mr [NAME] email to be included (in effect) as a part of his submissions in the determination bundle to the Tribunal for this case.

34. In accordance with the Directions, in an email dated 6 December 2024 to the parties, it is made clear for the email in question to be included in the

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determination bundle, either the Landlord is required to serve a Case Management application for the same, or the Tenant can agree the email be included in any event. Ms [APPELLANT] confirmed in her email dated 6 December 2024 that Mrs [NAME] was happy for the email to be included.

35.

Accordingly, the Tribunal has taken into consideration Mr [NAME] email dated 3 December 2024 to reach its decision. The Law When determining a fair rent, the Tribunal, in accordance with the Rent Act 1977, section 70, had regard to all the circumstances including the age, location and state of repair of the property. It also disregarded the effect of (a) any relevant tenant's improvements and (b) 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. [COMPANY] v [NAME] of the Greater Manchester & Lancashire Rent Assessment Committee (1995) 28 HLR 107 and [NAME] v [NAME] [1999] QB 92 the Court of Appeal emphasised: (a) that ordinarily a fair rent is the market rent for the property discounted for 'scarcity' (i.e. that element, if any, of the market rent, that is attributable to there being a significant shortage of similar properties in the wider locality available for letting on similar terms - other than as to rent - to that of the regulated tenancy) and (b) that for the purposes of determining the market rent, assured tenancy (market) rents are usually appropriate comparable lettings. (These rents may have to be adjusted where necessary to reflect any relevant differences between those comparable lettings and the subject property).

36. The Tribunal is also to have regard to the Rent Acts (Maximum Fair Rent) Order 1999, where applicable. Most objections and determinations of registered rents are now subject to the Order, which limits the amount of rent that can be charged by linking increases to the Retail Price Index (‘RPI’). It is the duty of the Property Tribunal to arrive at a fair rent under section 70 of the Act, but in addition to calculate the maximum fair rent which can be registered according to the rules of the Order.

37. If that maximum rent is below the fair rent calculated as above, then that (maximum) sum must be registered as the fair rent for the subject property.

38. The tenancy is a statutory (protected) periodic tenancy and as such (not being for a fixed tenancy of 7 years or more) is subject to section 11 of the Landlord and Tenant Act 1985, which sets out the landlord’s statutory repairing obligations; the tenant is responsible for internal decorations. Considerations and Valuation 39. The Tribunal first considered whether it felt able to decide this case reasonably and fairly based on the papers submitted only, with no oral hearing. Having read and considered the papers the Tribunal decided it

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could do so.

40. In the first instance the Tribunal determined the market rent per calendar month the Landlord could reasonably expect to receive on the valuation date, 17 December 2024, on the assumptions the property was in good condition, with floorings, curtains and white goods provided by the Landlord.

41. To determine the market rent the Tribunal has considered the evidence provided by the parties, coupled with its own general knowledge of market rents in the south-west Devon coastal area.

42. Mr [NAME] does not give his opinion of the rental value for the property. His approach is to question the Rent Officer as to how the fair rent of £690 per calendar month was reached when ‘…I have looked on Rightmove and can only find one two bed, one bathroom house in the whole of Plymouth for less than £900 pcm and a handful for less than £1,000 pcm.’ 43. Similarly, Ms [NAME] does not give her opinion of the rental value either; but says ‘…The tenant could understand a request for a rental increase of 7.4% as suggested by the landlord is the current rate of increase in Plymouth.’ 44. Taking the above into consideration and the Tribunal having perused Rightmove for similar properties both let recently and available to rent in the area at the valuation date, the Tribunal determined the market rent of the property to be £1,150 per calendar month, before any adjustment(s) which it deemed applicable were to be applied.

45. From the evidence in the parties’ Appeal Statements, the Tribunal has determined that adjustments to the market rent are to be applied to reflect the following: • The Tenant’s provision of carpets and curtains. • The Tenant’s provision of the white goods. • The Tenant’s responsibility for internal decorations. • The unmodernised bathrooms and WCs. • The unmodernised kitchen. • No Central Heating. • The damp in the property.

46. The Tribunal concluded a deduction in aggregate of £465 per calendar month be applied to the market rent, made up as follows: Carpets and curtains £50 White goods £30 Internal decorations £50 Unmodernised bathrooms and WCs £75 Unmodernised kitchen £120

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Central heating £120 Damp £20 TOTAL £ Per Calendar Month £465 47. £1,150 per calendar month minus £465 per calendar month, to equal £685 per calendar month.

48. Turning to the question of scarcity (that is, whether the demand for such properties exceeds supply), Mr [NAME] refers to the increase in fair rent registered by the Rent Officer in nearly five years at 6%, whereas rental values in Plymouth have increased by 7.4%. The Tribunal is obliged to advise Mr [NAME] submission on scarcity in this context is misconceived and thus is not relevant to the valuation factor.

49. Ms [NAME] is silent on the subject of scarcity.

50. The Tribunal noted the number of properties recently let and available to rent in the wider locality as advertised on Rightmove and concluded there is no adjustment required for scarcity in the area. Decision 51.

Accordingly, having made the adjustments listed above, The Tribunal determined the Fair Rent of the property be re-registered at £685 (Six Hundred and Eighty-Five Pounds) Per Calendar Month, to take effect from 17 December 2024.

52. The capping provisions of the Rent Acts (Maximum Fair Rent) Order 1999 do not apply because the rent determined is less than the maximum prescribed, which the Tribunal calculated to be £924 (Nine Hundred and Twenty-Four Pounds) Per Calendar Month.

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RIGHTS OF APPEAL

1. A person wishing to appeal this decision to the Upper Tribunal (Lands Chamber) must seek permission to do so by making a written application by email to [EMAIL] to the First-tier Tribunal at the Regional office which has been dealing with the case.

2. The application must arrive at the Tribunal within 28 days after the Tribunal sends to the person making the application written reasons for the decision.

3. If the person wishing to appeal does not comply with the 28 days’ time limit, the person shall include with the application for permission to appeal a request for an extension of time and the reason for not complying with the 28 days’ time limit; the Tribunal will then decide whether to extend time or not to allow the application for permission to appeal to proceed.

4. The application for permission to appeal must identify the decision of the Tribunal to which it relates, state the grounds of appeal and state the result the party making the application is seeking.