Tribunal Sets Fair Rent for Property Under Rent Act 1977

OUTCOME: Allowed

FR27 First-tier Tribunal – Property Chamber File Ref No. TR/LON/00AS/F77/2024/0681

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were 27 [ADDRESS] [POSTCODE]

Judge Tagliavini Mrs S [APPELLANT]

Tenant Miss [APPELLANT]

1. The fair rent is £1,036 Per month (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 26th February 2025

3. The amount for services is

Per

not applicable

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 (please see calculation overleaf. 7. Details (other than rent) where different from Rent Register entry

None

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 £1,106 ................................ per month.

Chairman Judge Tagliavini Date of decision 26th February 2025

FR27 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 391.7

PREVIOUS RPI FIGURE Y 356.2

X 391.7 Minus Y 356.2 = (A) 35.5

(A) 35.5 Divided by Y 356.2 = (B) 0.09966

First application for re-registration since 1 February 1999 NO

If yes (B) plus 1.075 = (C)

If no (B) plus 1.05 = (C) 1.14966

Last registered rent* 962.00 Multiplied by (C) = 1,105.97 *(exclusive of any variable service charge)

Rounded up to nearest 50p = £1,106.00

Variable service charge NO If YES add amount for services

MAXIMUM FAIR RENT = £1,106.00 Per 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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Case Reference

: LON/00AS/F77/2024/0681

Property : 27 [ADDRESS] [POSTCODE]

Tenant

: Miss [APPELLANT]

Landlord : [APPELLANT] of Objection :

Type of Application : Section 70, Rent Act 1977

Tribunal

: Judge Tagliavini

Mrs S Redmond MRICS

Date

: 26 February 2025

_______________________________________________

DECISION

The sum of £1,036 per month will be registered as the fair rent with effect from 26 February 2025 being the date the Tribunal made the Decision. ____________________________________

© CROWN COPYRIGHT 2023

FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

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SUMMARY REASONS

Background

1. Following an objection from the Landlord to the determination of a fair

rent, the Tribunal has made a determination under the provisions of the

Rent Act 1977.

Inspection

2. The Tribunal did not inspect the property but considered this case on the

basis of the papers provided by the parties.

Evidence

3. The Tribunal considered the written submissions provided by the

Landlord and the Tenant, in addition to the documents provided by the

Rent Officer who determined the Fair Rent and to which the Landlord

has objected.

Determination and Valuation

4. The Landlord provided the Tribunal with a valuation supported by six

comparables properties. Details of these properties were provided and

included photos and descriptions, but no tenancy agreements were

provided to show the passing rents in respect of these properties.

5. The approach taken by the Landlord was to produce an average rent

per square metre by using the floor area from EPC certificates and

applied to the subject EPC area to give £1,770,83. From this figure,

deductions were made for Tenant's decoration, carpets and curtains,

condition, white goods and lack of central heating amounting to about

14% and resulted in an adjusted figure of £1,520.83. It was stated that

there is no scarcity in the area.

6. However, the landlord did not make adjustments to the comparables to

account for differences between them and the subject property. The

Tribunal took into account that three of the comparables were semi-

detached and of the terraced houses, one had a conservatory, 2 living

rooms and a first floor bathroom.

7. The tribunal found the most helpful comparable to be [ADDRESS] at £1,850 per month, which is in the near vicinity and of similar

size and layout to the subject property with a GF bathroom. The Tribunal

considered that the open market rent for the subject property in good

and tenantable condition is £1,850 per month. From this the Tribunal

deducted 30% to account for lack of central heating, the un-refurbished

bathroom and kitchen (stated to have been improved by the tenant),

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the tenant's liability for floor coverings, decoration and white goods. This

results in an adjusted market rent of £1,295.00 per month.

8. The tribunal also made an adjustment for scarcity of 20% which

relates to a wide area of Greater London in accordance with case law.

9. Therefore the Tribunal’s valuation is as follows:

Open market rent £1,850 per calendar month

Less a global deduction of 30% £ 555

Adjusted market rent £1,295

Less Scarcity of 20% £ 259

Fair Rent £1,036 per calendar month

Decision

10. The uncapped fair rent initially determined by the Tribunal, for the

purposes of section 70 of the Rent Act 1977 was £1,036 per calendar

month. However, the capped rent for the property according to the

provisions of the Rent Acts (Maximum Fair Rent) Order 1999 is

calculated at £1,106 per calendar month. The calculation of the capped

rent is shown on the decision form.

11. In this case the lower rent of £1,036 per calendar month is to be

registered as the fair rent or this property.

Chairman: Judge Tagliavini Date: 26 February 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