Tribunal Sets Fair Rent of £330 per Week for Egham Property

OUTCOME: Allowed

FR27 First-tier Tribunal – Property Chamber File Ref No. HAV/43UG/F77/2025/0601

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were: 34 [ADDRESS] [POSTCODE]

[NAME] [NAME] [RESPONDENT]

Landlord Mr [APPELLANT] & Mrs [APPELLANT] M [APPELLANT]

Tenant Mrs [APPELLANT] M [APPELLANT]

1. The fair rent is £330.00 Per Week (To exclude Water Rates and Council Tax, but to include any amounts in paragraphs 3 and 4).

2. The effective date is 12 May 2025

3. The amount for services is not applicable n/a Per n/a

4. The amount for fuel charges is not applicable

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 Rent Register entry

8. For information only:

(a) 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 £358.50p per Week prescribed by the Order.

[NAME] [NAME] of decision 12 May 2025

FR27 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 395.3

PREVIOUS RPI FIGURE Y 260.6

X 395.3 Minus Y 260.6 = (A) 134.7

(A) 134.7 Divided by Y 260.6 = (B) 0.51688

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) 1.56688

Last registered rent* £228.50 Multiplied by (C) = £358.03p *(exclusive of any variable service charge)

Rounded up to nearest 50p = £358.50p

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

MAXIMUM FAIR RENT = £358.50 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.

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

Case reference : HAV/43UG/F77/2025/0601

Property : 34 [ADDRESS], [POSTCODE]

Applicant tenant : Mrs [COUNSEL], c/o Ms [COUNSEL] : None

Respondent landlords : Mr [COUNSEL] H [COUNSEL] and Mrs [COUNSEL] : None

Type of application : Determination of a Fair Rent Section 70, Rent Act 1977

Tribunal members : Mr [NAME] [NAME] [NAME] of inspection : 18 March 2025

Date of hearing : 29 April 2025

Date of decision : 12 May 2025

DECISION

© CROWN COPYRIGHT 2024

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Decision of the Tribunal On 1 2 May 2025 the Tribunal determined a Fair Rent of £330 (Three Hundred and Thirty Pounds) Per Week to take effect from 12 May 2025. Background 1. On 21 October 2024 the landlords (Mr [NAME] and Mrs [NAME] M [NAME]) submitted an application for registration of Fair Rent (‘RR1’) to the Rent Officer (received by VOA Durham CSC on 22 October 2024) to register a fair rent of £334 per week for the property, 34 [ADDRESS], [POSTCODE] (‘the property’).

2. This was an application to re-register the fair rent from its previous registration of rent for the property of £228.50p per week, effective from 2 December 2015.

3. A new rent of £303 per week was registered by the Rent Officer, effective from 17 December 2024. The uncapped rent was not specified.

4. In an email dated 22 December 2024 to NSO Helpdesk (VOA) the tenant’s representative, Ms [COUNSEL], gave her 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 14 January 2025. 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. However, at the Tribunal’s inspection, which the landlords attended, the Tribunal determined a hearing would be appropriate.

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. Following on from paragraph 6 above, having reviewed the bundle (‘the papers’) which comprises 208 pages, the Tribunal determined that an inspection was required.

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 party to present the issues.

9. Both parties submitted a Statement in accordance with the Directions. In broad terms, the Statements include a description of the property, a ‘handed’ floor plan and some external photographs.

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The Property 10. The property is a late Victorian (an inlay to the front elevation is dated 1894), detached house, on the ground and first floors of traditional brick construction with a pitched tiled roof. Egham is located just off the A30, to the west of Staines. Junction 13 of the M25 is close by.

11. In the RR1 dated 17 December 2024, the number and type of room(s) is listed as: ground floor – two rooms, one kitchen, one bathroom and one WC and first floor - three rooms (bedrooms). Outside there is a car- parking space and a garden. The Tribunal has been provided with a floor plan by the landlords in their Statement; albeit the floor plan depicts a handed layout.

12. The Tribunal carried out its inspection of the property on 18 March 2025, which at the time was vacant with only fitted fixtures and fittings in situ. Whereas the landlords attended and accompanied the Tribunal at their inspection, the tenant’s representative did not.

13. At its inspection of the property the Tribunal noted the accommodation, the car-parking space and the rear garden are all as outlined by the Rent Officer. In outline the Tribunal noted the property’s condition and features as follows: the external walls and roof were in repair, the garden was unkempt with some mature shrubs, the gas fired central heating, double glazing, dated bathroom and WC equipment, no white goods, dated wall and base units in the kitchen and evidence of damp penetration.

14. In her Statement, Ms [NAME] has provided a copy of the Energy Performance Certificate (EPC), dated 6 February 2025, which gives an energy rating for the property of ‘F’, valid until 5 February 2035.

15. Overall, the Tribunal found the property to be in a reasonable condition, with some general wants of repair. The Tenancy Agreement 16. The Tribunal has not been provided with a copy of the tenancy agreement, although from the RR1 it is understood to have commenced in 1971.

17. From the correspondence in the papers, the landlords believe there was a verbal agreement between Ms [NAME] father and the landlady at the time ([NAME]).

18. The tenant is responsible for the payment of Council Tax and Water Rates. Section 11 of the Landlord and Tenant Act 1985 applies. The tenant is responsible for internal decorations. Submissions – Fair Rent Appeal Statements and the Hearing 19. It is not the Tribunal’s intention to give an analysis of all the evidence in the papers, but to outline the overall valuation approaches of the parties, to show that all aspects have been considered.

20. Following what the Tribunal says in paragraph 7 above, the papers

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comprise 208 pages. At the hearing, held at Staines County Court, was only attended by the landlords, the Tribunal confirmed it was to consider the case de novo (from anew) and it would limit its considerations to reach its decision to those points in the parties’ Statements, the papers and the submissions given by the landlords at the hearing, relevant to the determination of the fair rent.

21. In their covering letter dated 27 January 2025, the landlords submitted their Statement with enclosures informing the Tribunal they ‘only communicate by post or fax…’. The same was sent to the tenant on 28 January 2025.

22. Under ‘Your assessment of the rental value of the property’, the landlords say Estate Agents’ details are attached as required. [NAME]. Estate Agents in their letter to the landlords dated 18 January 2025 provide a lettings’ appraisal for the property and advise to let No. 34 at £2,250 per month, with an additional £50 per month to include one pet. 23. [NAME]. include a ‘Best Price Guide’ for the period from 18 October 2023 to 18 January 2025 which includes, in outline, lettings’ particulars of three-bedroom, detached and semi-detached houses advertised in the last 15 months. The range of rental values of the four properties in Egham listed is from £2,250 per calendar month to £2,600 per calendar month.

24. At the hearing, in his oral submission to the Tribunal, Mr [NAME] said the previous (2015) registration of fair rent was £917 per month, the appeal rent (the Rent Officer’s December 2024 determination of fair rent) was £1,212 per month and the market rent (the Rent Officer’s December 2024 market rent) was £1,750 per month. The Tribunal expands on this later.

25. Under ‘Whether the Maximum Fair Rent Order should not apply (give reasons)’, the landlords triple-underline ‘should not apply’ and go on to say, ‘‘Due to the extent of improvement works and extra facilities provided to enhance the property for the tenant.’’ 26. In answer to the Tribunal’s question to what items of works do the landlords submit are those to which they are to rely, such that section 2(7) of the Rent Acts (Maximum Fair Rent) Order 1999 is to apply? Mr [NAME] answered the works set out in their letter to the VOA dated 21 October 2024. At this juncture the Tribunal notes the various works to which Mr [NAME] refers were carried out by: (1) [COMPANY] – roofing contractors, [NAME] and [COMPANY]. Electricians. The aggregate of the invoices listed is £34,856.

27. Under ’Whether the demand for such properties exceeds supply’, the landlords say, ‘According to the Martin Agents apparently not’ [sic].

28. In her Statement, Ms [NAME] confirms a copy of the same was sent to the landlords on 10 February 2025.

29. The accommodation is confirmed as outlined in paragraph 11 above.

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30. Under ‘Features’, it is agreed that no white goods are provided and there is off-street parking. The following are not agreed: a) The provider of the central heating. b) The provision of double glazing. c) The provider of the carpets (floor coverings) and curtains. Under ‘Improvements’, Ms [NAME] says, ‘None known of.’ 31. Under ‘Condition of the property’, Ms [NAME] says, ‘Very poor repair. Windows poorly maintained. Carpets and walls unkempt.’ 32. Ms [NAME] does not give her assessment of the rental value of the property but refers to three Appendices to the Statement that form the appeal.

33. Appendix 1 – Background: in essence Ms [NAME] questions whether the property is ‘compliant’ with respect to legislation associated with the letting of residential property and goes on to say an EPC survey was commissioned on 6 February 2025 ‘…to support their rent tribunal appeal.’ A copy of which has been provided.

34. Appendix 2 – Legislation: following Appendix 1, Ms [NAME] questions whether there has been ‘a significant breach of legislation’ due to the landlords having failed to satisfy their obligation to provide an EPC.

35. In reply to Ms [NAME] point on the question of the requirement for an EPC at the property with an appropriate rating, in his oral submission at the hearing, Mr [NAME] said the same did not apply and sought to provide the Tribunal with further documentary evidence in support. The Tribunal made it clear to Mr [NAME] that to provide further evidence at this juncture in the absence of the tenant was not acceptable and then added that as an expert Tribunal in residential property it has knowledge of the Minimum Energy Efficiency Regulations (‘the Regulations’), which include provisions for exemptions.

36. Appendix 3 – Grounds for Appeal: Ms [APPELLANT] sets out the tenant’s grounds for appeal, briefly as follows: (1) absence of an EPC; (2) an energy rating for the property as at 6 February 2025 of ‘F’; (3) an energy rating of ‘F’ materially impacts on the rental value; (5) [sic] an increase in running costs due to the ‘F’ rating; and (6) in conclusion, the proposed increase in fair rent to £303 per week is challenged on the basis of ‘a floored appraisal process’ [sic] and important evidence having not been made available by the landlords to the Rent Officer at the time.

37. Similarly, under ‘Whether the Maximum Fair Rent Order should not apply (give reasons)’, Ms [NAME] again refers to the three Appendices. 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

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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).

38. The Tribunal is also to have regard to the Rent Acts (Maximum Fair Rent) Order 1999 (‘the Order’), 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.

39. 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.

40. Section 2(7) of the Order is as follows, ‘This article does not apply in respect of a dwelling-house if because of a change in the condition of the dwelling-house or the common parts as a result of repairs or improvements (including the replacement of any fixture or fitting) carried out by the landlord or a superior landlord, the rent that is determined in response to an application for registration of a new rent under Part IV exceeds by at least 15% the previous rent registered or confirmed.’ 41. 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 42. Having reviewed the papers, the Tribunal first considered whether it felt an inspection was necessary. The Tribunal determined an inspection was necessary and carried out the same on 18 March 2025.

43. Whereas the landlords attended the Tribunal’s inspection, the tenant’s representative did not. At the property the Tribunal considered whether it felt able to decide this case reasonably and fairly based on the papers

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submitted only, with no oral hearing. Having read and considered the papers, coupled with its inspection, the Tribunal decided it could not do so.

44. Subsequently a hearing was arranged and set down for 29 April 2025. Similarly with the Tribunal’s inspection of the property, the landlords attended the hearing, but the tenant’s representative did not.

45. In the first instance the Tribunal determined the market rent per week the landlords could reasonably expect to receive on the valuation date, 12 May 2025, on the assumptions the property was in good condition, with floorings, curtains and white goods provided by the landlords.

46. To determine the market rent the Tribunal has considered the evidence provided by the landlords, coupled with its own general knowledge of market rents in north-west Surrey.

47. In their Statement the landlords have provided the Tribunal with a lettings market appraisal given by [NAME]. in which their advice is to let the property at £2,250 per month, with an additional £50 per month to include one pet. The range of rental values provided by [NAME]. for comparable three-bedroom houses marketed to let from October 2023 to January 2025 is from £2,250 per calendar month to £2,600 per calendar month. The Tribunal notes from the map provided in the Best Guide Price that each of the four properties is in close proximity to the subject property.

48. Whereas the landlords have not given their assessment of the market rent of the property, in his oral submission at the hearing Mr [NAME] referred to the Rent Officer’s determination of £1,750 per month. The Tribunal notes when Mr [NAME] referred to rental values ‘per month’ he had in fact taken the Rent Officer’s determinations of rental values per week and multiplied them by four. £1,750 divided by four to equal £437.50. The Rent Officer had determined a market rent of £437 per week for the property in December 2024.

49. Following on to what Mr [NAME] said, for the ‘appeal rent’ of £1,212 per month, £1,212 divided by four, to equal, £303. The Rent Officer’s determination of fair rent effective from 17 December 2024 is £303 per week.

50. Similarly, £917 per month, the Rent Officer’s determination of fair rent to be effective from 2 December 2015, £917 divided by four to equal, £229.25. The Rent Officer’s determination of fair rent to be effective from 2 December 2015 was £228.50 per week.

51. Ms [NAME] has not provided an assessment of the market rent for the property. However, in her ‘Grounds for Appeal’, Ms [NAME] raises questions on the landlords’ compliance with legislative requirements with respect to property to let in the residential market and specifically on the requirements of an EPC with an appropriate rating.

52. Taking the general point first, the landlords in their Statement include (this list is not intended to be exhaustive): (1) Landlord/Home Owner

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Gas Safety Records/Certificates; (2) Electrical Installation Condition Report/Certificate; (3) Building Regulations Certificate of Compliance; (4) confirmation of Alarm testing; and (5) add that there are no PAT tests for portable equipment as this equipment is the tenant’s property.

53. From the documents provided, the Tribunal is satisfied the landlords have met their statutory compliance obligations for the letting of residential property.

54. On the question of an EPC and the tenant having commissioned their own survey, the Tribunal notes the property’s rating of ‘F’ on 6 February 2025 and the steps that could be taken to save energy, with their corresponding typical installation costs. The Tribunal determines whereas there is a legal requirement for an EPC, with the property being let on a relevant tenancy type, an exemption to the Regulations would apply on the basis the costs to improve the property to meet the minimum standard of EPC band E would be higher than the cost limit of £3,500 to include VAT, which is one of the reasons to which an exemption applies.

55. Taking the above into consideration and of its own general knowledge of market rental values in the area, at the valuation date, the Tribunal determined the market rent of the property to be £425 per week, before any adjustment(s) which it deemed applicable were to be applied.

56. From the evidence in the parties’ Appeal Statements, its inspection and the oral submissions of Mr [NAME], the Tribunal has determined that whereas both the gas fired central heating and double glazing have been provided by the landlords, the tenant has provided the carpets (floor coverings) and curtains.

57.

Accordingly, the Tribunal has determined that adjustments to the market rent are to be applied to reflect the following: • General wants of repair to the property. • The tenant’s provision of carpets (floor coverings) and curtains. • The tenant’s provision of the white goods. • The tenant’s responsibility for internal decorations. • The dated bathroom and WC equipment. • The dated wall and base units in the kitchen.

58. The Tribunal concluded a deduction in aggregate of £95 per week be applied to the market rent, made up of as follows: General wants of repair to the property £12.50 Carpets (floor coverings) and curtains £12.50 White goods £7.50 Internal decorations £12.50 Dated bathroom/WC equipment £25

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Dated kitchen equipment £25 £ Per Week £95 59. £425 per week minus £95 per week to equal, £330 per week.

60. Turning to the question of scarcity, that is whether the demand for such properties exceeds supply, the landlords refer to [NAME]’s appraisal and say, ‘…apparently not.’ Ms [NAME] does not address the point. Following the evidence of [NAME]. and its general knowledge of the lettings market in the area, the Tribunal has concluded there is no adjustment required for scarcity in this registration of fair rent.

61. Finally, the Tribunal is required to address the question whether section 2(7) of the Maximum Fair Rent Order applies. The landlords submit that the capping legislation does not apply to this registration and to support their argument they rely on the works carried and listed in their letter dated 21 October 2024 to the VOA.

62. As outlined at paragraph 25 above, the works to which the Tribunal is to refer are, in outline, a new roof covering with its associated loft insulation, removal of excessively large conifers in the rear garden and some electrical works. The aggregate of the costs of the works is £34,856.

63. For section 2(7) to apply the works to which the Tribunal has been referred are to have added at least 15% to the previously registered fair rent. The previous registration of fair rent was in December 2015 at £228.50 per week (15% of £228.50 to equal £34.50, rounded up). The corresponding uncapped rent was £265.00 per week (15% of £265.00 to equal £40.00, rounded up).

64. Whereas the landlords’ submission is that section 2(7) of the Order is to apply, it is unclear from their Statement and the papers generally whether they were both aware of the contents of and understood the requirements of the section. Save to refer the Tribunal to the items of works, the landlords provide the Tribunal with neither valuation evidence nor corresponding analyses to support their claim.

65. There is no evidence before the Tribunal that the property was uninhabitable, prior to the old roof covering having been replaced. To replace a roof is a part of the continuing cycle of works required to maintain a dwelling. To carry out arboreal and electrical works are a part of day-to-day external and internal maintenance too. The rental value of the property is substantially derived from the accommodation it provides and the location in which it is situated, not the replacement of its roof, coupled with some arboreal and electrical works.

66. In aggregate, the works to which the landlords refer, the Tribunal determine add no more than 5% to 7.5% to the rental value.

Accordingly, the, ‘…at least 15%’ threshold requirement of the Order has not been met.

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Decision 67. Accordingly, having made the adjustments listed above, The Tribunal determined the Fair Rent of the property be re-registered at £330 (Three Hundred and Thirty Pounds) Per Week, to take effect from 12 May 2025.

68. 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 £358.50p (Three Hundred and Fifty-Eight Pounds and Fifty Pence) Per Week.

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.