Tribunal Sets Fair Rent for Property

OUTCOME: Allowed

FR27 First-tier Tribunal – Property Chamber File Ref No. HAV/43UJ/F77/2025/0628

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were 51 [ADDRESS] [POSTCODE]

[NAME] [NAME] [RESPONDENT] Mr [RESPONDENT].J.[APPELLANT]

Landlord [APPELLANT]

Tenant Mr [APPELLANT]

1. The fair rent is £880.00 Per Calendar Month (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 24 September 2025

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

not applicable

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

n/a Per n/a

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 (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 not limited by the Rent Acts (Maximum Fair Rent) Order 1999, because it is below the maximum fair rent of £947.00 per Calendar Month prescribed by the Order.

[NAME] of decision 24 September 2025

FR27 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 406.2

PREVIOUS RPI FIGURE Y 323.5

X 406.2 Minus Y 323.5 = (A) 82.7

(A) 82.7 Divided by Y 323.5 = (B) 0.2556

First application for re-registration since 1 February 1999 NO

If yes (B) plus 1.075 = (C)

If no (B) plus 1.05 = (C) 1.3056

Last registered rent* £725.00 Multiplied by (C) = £946.56 *(exclusive of any variable service charge)

Rounded up to nearest 50p = £947.00

Variable service charge NO If YES add amount for services

MAXIMUM FAIR RENT = £947.00 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.

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

Case Reference : HAV/43UJ/F77/2025/0628

Property : 51 [ADDRESS],

[POSTCODE]

Applicant Landlord : [APPELLANT] : [NAME]

Respondent Tenant : Mr [COUNSEL] :

Type of Application : Determination of a registered rent

Section 70 Rent Act 1977

Tribunal Members : [NAME] [NAME] [NAME] [NAME]

Mr [NAME].J.[NAME]. [NAME] of Decision : 24 September 2025

REASONS

© CROWN COPYRIGHT

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Decision of the Tribunal

On 24 September 2025 the Tribunal determined that a sum of £880.00 per month will be registered as the Fair Rent with effect from the same date.

Background

1. On 8 May 2025 the Rent Officer received an application from the landlord for registration of a Fair Rent of £870.00 per month in lieu of the passing rent of £725.00 per month.

2. On 1 July 2025 the Rent Officer registered a Fair Rent of £777.00 per month, effective from the same date.

3. On 18 July 2025 the landlord, via their representative, objected to the registered Fair Rent and requested the Rent Officer to refer the matter to the Tribunal.

4. The tenancy appears to be a statutory protected tenancy, with the Rent Register including a commencement date of 1982. The Tribunal was not provided with a copy of the tenancy agreement.

5. The Rent Register provides that the landlord is responsible for repairs and external decorations. The tenant covenants to decorate internally. Section 11 Landlord and Tenant Act 1985 applies.

6. On 12 August 2025 the Tribunal issued Directions advising the parties that it considered the matter suitable for determination on papers unless either party objected, in writing, within 7 days. The parties were advised that no inspection would be undertaken. No objections were received.

7. The Directions required the landlord and tenant to submit their statements to the Tribunal by 26 August 2025 and 9 September 2025 respectively. Representations were received from the landlord only.

8. Having reviewed the landlords’ submission, the Tribunal concluded that the matter was capable of being determined fairly, justly and efficiently on the papers, consistent with the overriding objective of the Tribunal.

9. These reasons address only the key issues raised by the parties. They do not recite each point referred to in submissions but concentrate on those issues which, in the Tribunal’s view, are fundamental to the determination.

Law

10. When determining a Fair Rent the Tribunal, in accordance with section 70 of the Rent Act 1977, must have regard to all the circumstances including the age, location and state of repair of the property. The Tribunal must disregard the effect, if any, of any relevant tenant’s improvements and the effect of any disrepair or any other defect attributable to the tenant or any

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predecessor in title under the regulated tenancy, on the rental value of the property.

11. In [COMPANY] v [NAME] of the Greater Manchester etc Committee (1995) 28HLR 107 and [NAME] v [NAME] (1999) QB 92 the Court of Appeal emphasised:

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 to that of a regulated tenancy, and

That for the purposes of determining the market rent, assured tenancy market rents are usually appropriate comparables; adjusted as necessary to reflect any relevant differences between the comparables and the subject property.

12. The Rent Acts (Maximum Fair Rent) Order 1999 restricts the amount by which the rent, less variable service charge, may be increased to a maximum 5.00% plus Retail Price Index since the last registration.

13. Under paragraph 7 of the Order an exemption to this restriction applies where the Landlord proves that repairs or improvements undertaken have increased the rent by at least 15% of the previous registered rent.

The Property

14. From the information provided in the papers and images publicly available online [ADDRESS] is a two-storey terraced house of traditional brick construction, believed to have been constructed during 1800-1918.

15. The property is situated in a row of similar residential dwellings, adjacent the A30. The property is within easy reach of amenities and public transport.

16. From the description provided by the landlord, and included in the Rent Register by the Rent Officer, the accommodation comprises: reception room, kitchen, two bedrooms and a bathroom with WC. Outside, there is a garden. There is no allocated parking.

Submissions

17. In their written submissions, the landlord stated that they accept the Rent Officer’s findings regarding the condition and presentation of the property. Furthermore, they do not appear to dispute the accommodation details listed by the Rent Officer, nor the tenant’s provision of white goods, heating, carpets and curtains.

18. The appeal does not concern the heads of deductions applied to the open market rent, but rather the quantum of those deductions, with the landlord describing the amounts deducted as “arbitrary figures”.

19. The landlord cites the definition of market rent and asserts that the Rent Officer’s valuation must be justified “with comparables”. The landlord

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does not provide any comparable evidence, nor do they suggest what deductions they consider appropriate to reflect the acknowledged shortcomings of the property.

20. The landlord describes the bathroom as part of a new-build construction, the precise date of which was not provided. However, it was stated to have been completed in or around the early 2000s.

21. As noted, the landlord’s statement was silent on central heating, double glazing, carpets, curtains, improvements, condition of the property – (including disrepairs and defects), and condition of the bathroom and kitchen fittings. There were also no comments provided regarding the proximity of public transport or other relevant factors. The section of the form titled “Your assessment of the rental value of the property” was left blank. The landlord’s observations concerning the Rent Officer’s valuation, deductions and the issue of scarcity, were confined to the section addressing whether the Maximum Fair Rent Order should apply.

22. In consideration of scarcity – as required by the Rent Act 1977 – the Rent Officer applied a ten percent deduction, a figure the landlord asserted is not justified. The landlord states “The market is the market and the rental market has been the same for many years. I have no recollection of the Rent Officer increasing the rent when the imbalance was in favour of Landlords and therefore in order to ensure fairness, there can be no legal basis for reducing the rent when the imbalance is in favour of the Landlord".

23. It is convenient for the Tribunal to address the landlord’s statement regarding scarcity at this juncture. The landlord appears to have misunderstood the concept of scarcity as defined under the Rent Act 1977, particularly in their assertion that there is “no legal basis” for its application. Both the Rent Officer and the Tribunal are statutorily required to consider scarcity within this jurisdiction. We return to this point in further detail at paragraphs 32-33 of our decision.

24. The tenant did not provide a statement of case.

Consideration and Valuation

25. The Tribunal has carefully considered all of the submissions before it.

26. In the first instance, the Tribunal determined what rent the landlord could reasonably be expected to obtain for the property in the open market if it were let today in the condition that is considered usual for such an open market letting.

27. Neither party provided any comparable evidence. The Valuation Office Agency provided a screenshot from their database of five 3-bedroom terraced houses in postcode GU19 with market rents ranging from £1,085 pcm to £1,550 pcm. No further details were provided.

28. In the absence of any comparable evidence from either party, the Tribunal relied on the expertise of its members as a specialist property Tribunal, drawing upon their knowledge of prevailing rental values in the locality.

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Having done so, the Tribunal determined the open market rent – assuming the property to be in good tenantable condition - to be £1,100.00 per month. This figure reflects the property’s location adjacent to the busy A30 and the presence of a ground floor bathroom.

29. Once the hypothetical rent was established, it was necessary for the Tribunal to determine whether the property meets the standard of accommodation, repair and amenity of a typical modern letting. In this instance the Tribunal determined that the subject property falls short of the standard required by the market.

Accordingly, it was necessary for the Tribunal to adjust the hypothetical rent of £1,100.

30. It is not disputed by the landlord that the property lacks central heating and that the carpets, curtains, and white goods have not been provided. Nor is it contested that the kitchen remains unmodernised, the bathroom dates from the 200os, or the tenant bears responsibility for internal decoration.

31. The Tribunal considers that the decorating covenant imposes a greater obligation on the tenant than is ordinarily expected under an assured shorthold tenancy, where the tenant is typically only required to maintain the landlord’s decorations in good order. In light of this increased burden, the Tribunal considers it appropriate to apply a downward adjustment to the open market rent to reflect the tenant’s enhanced responsibility.

32. Having carefully considered the matter, the Tribunal concluded that a total deduction of £220.00 per calendar month should be applied to the hypothetical rent. This deduction is comprised as follows:

Unmodernised kitchen/dated bathroom 5% Lack of central heating

5% No white goods, carpets or curtains

5% Decoration liability

5%

TOTAL per Calendar Month

20%

Equating to a total deduction of £220.00

Rent determined £880.00 per calendar month

33. The Tribunal then directed itself to the question of scarcity, as referenced in paragraph 11 above and, in arriving at its decision on the point, takes account of the following:

a. The Tribunal interpreted the ‘locality’ for scarcity purposes as being the whole area of Bagshot and the villages of Lightwater, Windlesham, and Ascot (i.e. a sufficiently large area to eliminate the effect of any localised amenity which would, in itself, tend to increase or decrease rent); b. Availability of property to rent; c. Property rental prices which could be an indicator of increased availability of housing and a reduction in scarcity;

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34. The tenant made no submissions on the issue of scarcity. The [NAME], whilst objecting to the application of the scarcity concept, appeared to suggest an imbalance of supply and demand favouring landlords. The Tribunal has considered the matter independently and, drawing on its extensive experience of the local residential lettings market, concludes that there is currently no shortage of comparable rental properties within the defined locality.

Accordingly, the Tribunal declines to apply a deduction for scarcity.

Maximum Fair Rent

35. This is the rent calculated in accordance with the Maximum Fair Rent Order, details of which are shown on the rear of the Decision Notice.

36. The Rent Acts (Maximum Fair Rent Order) 1999 restricts the amount by which the rent, less any variable service charge, may be increased, to a maximum 5% plus RPI since the last registration.

37. The only exception to this restriction is provided under paragraph 7 of the Order where a landlord carries out repairs or improvements which increase the rent by 15% or more of the previous registered rent. The Tribunal determined that such exception does not apply in this instance.

38. The rent to be registered in this application is not limited by the Fair Rent Acts (Maximum Fair Rent Order) 1999 because it is below the Maximum Fair Rent that can be registered of £947.00 per month prescribed by the Order.

39. The Tribunal accordingly determines that the rent of £880.00 per month is registered as the Fair Rent with effect from 24 September 2025, that being the date of the Tribunal’s decision.

40. The rental figure determined by the Tribunal is the maximum rent that can be charged for the property and is fixed until the next registration. The landlord is under no obligation to charge the full amount.

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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 written application by email to [EMAIL] to the First-tier Tribunal at the [NAME] 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 day 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 day 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.