Tribunal Sets Market Rent for Assured Tenancy

OUTCOME: Allowed

MR22 First-tier Tribunal – Property Chamber File Ref No. LON/00BK/MNR/2024/0644

Notice of the Tribunal Decision and Register of Rents under Assured Periodic Tenancies (Section 14 Determination or Section 22 Determination)

Housing Act 1988 Section 14

Address of Premises The Tribunal members were 192 [ADDRESS] [POSTCODE]

[NAME], [NAME] [NAME], Valuer Member

Landlord [COMPANY] St. James’ Boulevard Newcastle Upon Tyne [POSTCODE]

Tenant Ms [APPELLANT]

1. The rent is: £ 1384.50 Per month (excluding water rates and council tax but including any amounts in paras 3)

2. The date the decision takes effect is: 1 November 2024

*3. The amount included for services is/is

negligible/not applicable - Per -

*4. Service charges are variable and are not included

5. Date assured tenancy commenced 18 November 2005

6. Length of the term or rental period Monthly

7. Allocation of liability for repairs As per the tenancy agreement

8. Furniture provided by landlord or [NAME]

9. Description of premises Second floor flat in a purpose-built block of flats. Bathroom, kitchen and living-dining room.

[NAME] of Decision 28 March 2025

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Case Reference

: LON/00BK/MNR/2024/0644

Property : 192 [ADDRESS] [POSTCODE]

Tenant

: Ms [APPELLANT]

Landlord : [COMPANY] of Objection

: 12 September 2024

Type of Application

: Determination of a Market Rent Sections 13 & 14 of the Housing Act 1988

Tribunal

: [NAME] [NAME] [NAME], Valuer Member

Date of Reasons

: 28 March 2025

_______________________________________________

DECISION AND REASONS

The Tribunal determines a rent of £1,384.50 per month with effect from 1 November 2024.

____________________________________

© CROWN COPYRIGHT 2023

FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

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REASONS

Background

1. By an application dated 12 September 2024, Ms [APPELLANT], the tenant of 192 [ADDRESS] [POSTCODE] (the subject property) referred to the First-tier Tribunal (the Tribunal) a notice of increase of rent served by the landlord under section 13 of the Housing Act 1988 (the 1988 Act).

2. The Landlord, [RESPONDENT] [COMPANY], served a notice proposing an increase in the rent. The notice proposed an increase in the rent from £1,326.53 per week to £1,464.09 per month. The notice was dated 4 September 2024 and proposed a starting date for the new rent of 1 November 2024.

3. The Tribunal issued Directions on 30 October 2024 instructing the parties to provide all relevant information and submissions upon which they wished to rely in this appeal.

4. Following receipt of the reply form from the Tenant, a request for an inspection of the property was made and took place on 31 January 2025 (see below).

The Law

5. In accordance with the terms of section 14 of the 1988 Act, the Tribunal proceeded to determine the rent at which it considered that the subject property might reasonably be expected to be let on the open market by a willing landlord under an assured tenancy.

6. In so doing the Tribunal, as required by section 14(2), ignored the effect on the rental value of the property of any relevant tenant's improvements as defined in sections 14(2) and (3) and any reduction in the value caused by a failure by the tenant to comply with any terms of the tenancy. Section 14 is reproduced at the end of these reasons.

7. In respect of this case section 16 of the 1988 Act is also relevant and this states:

“It shall be an implied term of every assured tenancy that the tenant shall afford to the landlord access to the dwelling-house let on the tenancy and all reasonable facilities for executing therein any repairs which the landlord is entitled to execute.”

3

Evidence

Tenant’s Submissions

8. The Tenant provided a completed Reply Form together with two comparables for properties to let being advertised in the area. Whilst this type of evidence is not conclusive evidence of the market rent obtained for these properties, it is illustrative of market rents at a point in time.

9. The first comparable is a flat located in the same block of flats as the subject property for an amount of £1,777 per month.

10. The second comparable is located on [ADDRESS], Kilburn. This comparable is in a different location to the subject property and is a converted flat, making this less suitable of a comparable for the purposes of this market rent assessment.

11. The Tenant also included part of a decision from the First-Tier Tribunal relating to another flat in the Dibdin House block. This set an amount of £1,072.50 per calendar month.

Landlords’ Submissions

12. The Landlord provided a completed Reply Form written submissions.

13. The Landlord confirmed that the kitchen and bathroom have been updated by the Tenant albeit without the consent of the Landlord.

14. The submissions make reference to properties in the W9 and NW6 areas being significantly more per month than the suggested rent, at approximately £2,500 per month. However, no evidence was included in the Landlord’s submissions on this.

15. The Landlord makes reference in their submissions to the other properties they let in this area which are a similar size which are £2,050 per month. No supporting evidence was provided of this.

Inspection

16. The Tribunal inspected the property on 31 January 2025 in the presence of the Tenant. The landlord did not attend and was not represented. The

4 property is a second floor, two-bedroom flat located in a 1930s purpose-built block of flats built of solid wall construction.

17. Central heating and double-glazed windows are installed throughout the property which both parties confirmed in their submissions were installed by the Landlord.

18. The central hallway off which all the rooms are accessed is carpeted and at the front door an intercom is located for the main door system. In the hallway there is also a large built-in storage cupboard.

19. The second bedroom is of a good size able to accommodate a double sized bed and has wardrobe. The room is carpeted and in there are some signs of damp near to the windows and external facing walls.

20. The bathroom has tiled floors and walls. It contains a bath with a mixer tap , shower head, sink and toilet. There is also a bathroom cabinet in the room. The condition is good.

21. The kitchen appeared to be in good condition with a good amount of storage and cabinet space. The flooring is wooden and the kitchen contained a cooker, hob, fridge, washing machine, sink and freezer.

22. The main bedroom is a good size containing a double bed, wardrobe, drawers and desk. There were signs of damp on the walls and behind some of the furniture.

23. The living room contains seating as well as a dining table and chairs. There appear to be no signs of damp within the room.

Determination and Valuation

24. The Tribunal initially needs to determine 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. In doing this, the Tribunal will consider the rental value of the property but must not consider the personal circumstances of the Tenant, as that is not a factor envisaged by the Act.

25. The comparable information provided by both parties is useful in assisting the Tribunal in reaching its decision. The comparable property in the same block as the subject property that was put forward by the Tenant was particularly useful to the Tribunal. The Tribunal has therefore determined a

5 market rent of £1,950 per calendar month for the subject property, if it were in good condition.

26. However, there are elements in the subject property that need to be taken into account and reflected via adjustments to the market rent. This includes an improvements to the kitchen and bathroom that need to be discounted for and signs of damp in some areas. The full valuation is shown below

£/month Market Rent

1,950

Less Kitchen by Tenant

) 5% Bathroom by Tenant

) 5% Damp issues

) 4% No flooring or curtains

) 5% No white goods

) 5% Tenant’s decoration liability ) 5%

565.50

£1,384.50 Hardship

27. Under section 14(7) of the 1988 Act, the Tribunal has a discretion to fix the starting date for the new rent from any point in time between the date set out in the notice of increase to the date that the rent is determined, if it appears to the Tribunal that the increase in rent would cause undue hardship to the tenant.

28. Within the Tenant’s written submissions to the Tribunal, she makes reference to the hardship that any increase in rent would cause her. However, no evidence was submitted to Tribunal (e.g., bank statements or expenses) and we are therefore unable to find any evidence of hardship that an increase in the rent would place on the Tenant.

Decision

29. The Tribunal determine that the market rent for the subject property is £1,384.50 per calendar month. This is effective from 1 November 2024 being the date specified on the Landlord’s notice.

Chairman: [NAME]: 28 March 2025

6 APPEAL PROVISIONS

If either party is dissatisfied with this decision, they may apply for permission to appeal to the Upper Tribunal (Lands Chamber). Any such application must be made within 28 days of this decision (regulation 52 (2) of The Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rule 2013. Any appeal in respect of the Housing Act 1988 should be on a point of law.

ANNEXE

Housing Act 1988

14.— Determination of rent by tribunal. (1) Where, under subsection (4)(a) of section 13 above, a tenant refers to the appropriate tribunal a notice under subsection (2) of that section, the appropriate tribunal shall determine the rent at which, subject to subsections (2) and (4) below, the appropriate tribunal consider that the dwelling-house concerned might reasonably be expected to be let in the open market by a willing landlord under an assured tenancy— (a) which is a periodic tenancy having the same periods as those of the tenancy to which the notice relates; (b) which begins at the beginning of the new period specified in the notice; (c) the terms of which (other than relating to the amount of the rent) are the same as those of the tenancy to which the notice relates; and (d) in respect of which the same notices, if any, have been given under any of Grounds 1 to 5 of Schedule 2 to this Act, as have been given (or have effect as if given) in relation to the tenancy to which the notice relates. (2) In making a determination under this section, there shall be disregarded— (a) any effect on the rent attributable to the granting of a tenancy to a [NAME]; (b) any increase in the value of the dwelling-house attributable to a relevant improvement carried out by a person who at the time it was carried out was the tenant, if the improvement— (i) was carried out otherwise than in pursuance of an obligation to his immediate landlord, or (ii) was carried out pursuant to an obligation to his immediate landlord being an obligation which did not relate to the specific improvement concerned but arose by reference to consent given to the carrying out of that improvement; and (c) any reduction in the value of the dwelling-house attributable to a failure by the tenant to comply with any terms of the tenancy. (3) For the purposes of subsection (2)(b) above, in relation to a notice which is referred by a tenant as mentioned in subsection (1) above, an improvement is a relevant improvement if either it was carried out during the tenancy to which the notice relates or the following conditions are satisfied, namely— (a) that it was carried out not more than twenty-one years before the date of service of the notice; and (b) that, at all times during the period beginning when the improvement was carried out and ending on the date of service of the notice, the dwelling-house has been let under an assured tenancy; and (c) that, on the coming to an end of an assured tenancy at any time during that period, the tenant (or, in the case of [NAME], at least one of them) did not quit. (3A) In making a determination under this section in any case where under Part I of the Local Government Finance Act 1992 the landlord or a [NAME] is liable to pay council tax in respect of a hereditament (“the relevant hereditament”) of which the

7 dwelling-house forms part, the [appropriate tribunal] 5 shall have regard to the amount of council tax which, as at the date on which the notice under section 13(2) above was served, was set by the billing authority— (a) for the financial year in which that notice was served, and (b) for the category of dwellings within which the relevant hereditament fell on that date, but any discount or other reduction affecting the amount of council tax payable shall be disregarded. (3B) In subsection (3A) above— (a) “hereditament” means a dwelling within the meaning of Part I of the Local Government Finance Act 1992, (b) “billing authority” has the same meaning as in that Part of that Act, and (c) “category of dwellings” has the same meaning as in section 30(1) and (2) of that Act. (4) In this section “rent” does not include any service charge, within the meaning of section 18 of the Landlord and Tenant Act 1985 , but, subject to that, includes any sums payable by the tenant to the landlord on account of the use of furniture [, in respect of council tax] 6 or for any of the matters referred to in subsection (1)(a) of that section, whether or not those sums are separate from the sums payable for the occupation of the dwelling-house concerned or are payable under separate agreements. (5) Where any rates in respect of the dwelling-house concerned are borne by the landlord or a [NAME], the [appropriate tribunal] 7 shall make their determination under this section as if the rates were not so borne. (6) In any case where— (a) the appropriate tribunal have before them at the same time the reference of a notice under section 6(2) above relating to a tenancy (in this subsection referred to as “the section 6 reference”) and the reference of a notice under section 13(2) above relating to the same tenancy (in this subsection referred to as “the section 13 reference”), and (b) the date specified in the notice under section 6(2) above is not later than the first day of the new period specified in the notice under section 13(2) above, and (c) the appropriate tribunal propose to hear the two references together, the appropriate tribunal shall make a determination in relation to the section 6 reference before making their determination in relation to the section 13 reference and, accordingly, in such a case the reference in subsection (1)(c) above to the terms of the tenancy to which the notice relates shall be construed as a reference to those terms as varied by virtue of the determination made in relation to the section 6 reference. (7) Where a notice under section 13(2) above has been referred to the appropriate tribunal, then, unless the landlord and the tenant otherwise agree, the rent determined by the appropriate tribunal (subject, in a case where subsection (5) above applies, to the addition of the appropriate amount in respect of rates) shall be the rent under the tenancy with effect from the beginning of the new period specified in the notice or, if it appears to the appropriate tribunal that that would cause undue hardship to the tenant, with effect from such later date (not being later than the date the rent is determined) as the committee may direct. (8) Nothing in this section requires the appropriate tribunal to continue with their determination of a rent for a dwelling-house if the landlord and tenant give notice in writing that they no longer require such a determination or if the tenancy has come to an end. (9) This section shall apply in relation to an assured shorthold tenancy as if in subsection (1) the reference to an assured tenancy were a reference to an assured shorthold tenancy.