Tribunal Sets Market Rent for Tenancy After Considering Property Condition

OUTCOME: Allowed

MR22 First-tier Tribunal – Property Chamber File Ref No. LON/00AW/MNR/2024/0621

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 5 [ADDRESS] [POSTCODE]

[NAME], Valuer Chair Mr C Norman FRICS, [NAME] as a Valuer Member

Landlord [NAME] 80 [ADDRESS] [POSTCODE]

Tenant [NAME] [APPELLANT] [NAME]

1. The rent is: £ 3062.50 Per month (excluding water rates and council tax but including any amounts in paras 3)

2. The date the decision takes effect is: 29 September 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 29 September 1992

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 Two-bedroom flat located on the second floor of a purpose built block of flats. The property contains a kitchen, living-dining room, small study room, en-suite to the master bedroom and a family bathroom.

[NAME] of Decision 10 March 2025

1

Case Reference

: LON/00AW/MNR/2024/0621

Property : 5 [ADDRESS] [POSTCODE]

Tenant

: [NAME] [APPELLANT] [NAME]

Landlord : [NAME] [APPELLANT] [NAME] of Objection : 10 August 2024

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

Tribunal

: [NAME] Mr C Norman [NAME] as a Valuer Member

Date of Reasons : 10 March 2025

_______________________________________________

DECISION AND REASONS

The Tribunal determines a rent of £3,062.50 per month with effect from 29 September 2024.

____________________________________

© CROWN COPYRIGHT 2023

FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

2 REASONS

Background

1. By an application dated 10 August 2024, [NAME] [APPELLANT] [NAME], the tenant of 5 [ADDRESS] [POSTCODE] (the [NAME] 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, [NAME] [RESPONDENT] [NAME], served a notice proposing an increase in the rent. The notice proposed an increase in the rent from £692.13 per week to £715.00 per week. The notice was dated 2 August 2024 and proposed a starting date for the new rent of 29 September 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 22 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 [NAME] property might reasonably be expected to be let on the open market by a [NAME] 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 written submission dated 10 November 2024 containing links to two comparable properties that were advertised on Rightmove during August 2024, that she would like the Tribunal to consider for the purposes of ascertaining the market rent. 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 located in [ADDRESS] W14 is described as a 3-bedroom flat. It is situated 0.4 miles from the [NAME] property at an asking rent of £3,000 per calendar month. Whilst the [NAME] property has a third room, both parties have described this as a “study room”.

10. The second comparable is located on [ADDRESS] W14 approximately a mile away from the [NAME] property and is described as a 2-bedroom flat with an additional study / nursery room. This property was advertised on Rightmove in August 2024 at rent of £2,850 per calendar month.

11. The Tenant also states in her submissions that any rent increase would cause her hardship and that she has had personal health issues to contend with this past year.

Landlords’ Submissions

12. The Landlord provided written submissions dated 2 November 2024. Contained within this submission are adverts for three properties that the Landlord would like the Tribunal to consider for the purpose of ascertaining the market rent for the [NAME] property.

13. Unfortunately, one of the pages in this submission has formatting errors meaning that details for one of the comparables provided is not clear. Nevertheless, the other two comparables information remain clear for the Tribunal to consider.

14. The first of these is a 2-bedroom flat in [ADDRESS], W14 which is located approximately 0.8 miles from the [NAME] property. From the one photo provided, it would appear to be in a modern good condition and was advertised at £3,792 per calendar month.

15. The second comparable is located at Abbots House, Kensington W14, the same location as the [NAME] property. This is a 2-bedroom flat and was advertised on Zoopla for £3,467 per calendar month.

16. Based on these submissions the Landlord states that a rent of (£3,550 per calendar month (£715 per week) is a market rent

17. The Landlord also provided submissions and documentation demonstrating the following works had been carried out and / or costs incurred:

4

• Boiler repair of £2,245.48 carried out in April 2024; • New fire approved front door at a cost of £4,048 in June 2024; • Service charge costs at a half yearly amount of £2,963.88.

Inspection

18. The Tribunal inspected the property on 22 January 2025 in the presence of the Tenant. The landlord did not attend and was not represented. The property is a second floor, two-bedroom flat located in a purpose built block of flats circa 1960s construction. The block consists of 7 floors. The block of flats is situated on a busy road but in a very well-connected area of London with [ADDRESS] only a short distance from the property. This is a prime residential area in central London.

19. Central heating is installed throughout the property which the Tenant confirmed during the inspection was already installed when the tenancy commenced. Fully functioning metal framed double glazing is also present throughout the property.

20. The central hallway off of which all of the rooms are accessed is large and carpeted. There is an entry phone stored within one of the hall cupboards to operate the main building door together with a larger built-in storage cupboard also available in the hall. At the end of the hall the original immersion boiler cylinder remains.

21. The main bedroom is of a good size and contains a built-in wardrobe space. The en-suite attached to this bedroom contains a toilet, sink and shower and whilst slightly dated is in good condition.

22. The second bedroom is also a good size, easily facilitating a double bed with room for a wardrobe. This room also includes a large built in storage cupboard.

23. The main bathroom to the property contains a toilet, sink, bath and shower mixer tap. It would appear that the toilet and sink have been replaced at some point in time. The Tenant confirmed that this was done by the Landlord when the bathroom was re-tiled by the Landlord some years ago. The original bath remains with a shower mixer tap being installed by the Tenant.

24. A small study room has been constructed where the balcony was originally located. This has resulted in a small “Juliette” style balcony serving this room.

25. The lounge-dining area is an L-shaped room which is large enough to accommodate suitable seating for the lounge together with a 6-person dining table.

26. The kitchen has a large amount of built in cupboard space but is dated. The flooring is a ceramic tile type flooring, and a new boiler has been installed by the Landlord.

5

27. More generally the common areas within the block are in good condition with no obvious signs of disrepair. There is a lift.

Determination and Valuation

28. 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.

29. 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 [NAME] property that was put forward by the Landlord was particularly useful to the Tribunal and carries most weight. The Tribunal has therefore determined a market rent of £3,500 per calendar month for the [NAME] property, if it were in good condition.

30. However, there are elements in the [NAME] property that need to be taken into account and reflected via adjustments to the market rent. This includes an unmodernised kitchen, dated nature of the overall flat and the provision of limited white goods. The full valuation is shown below

£/month Market Rent

3,500

Less Unmodernised kitchen

) 5% Limited white goods

) 2.5% Overall dated condition

) 5%

437.50

3,062.50

Hardship

31. 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.

32. 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.

6 Decision

33. The Tribunal determine that the market rent for the [NAME] property is £3,062.50 per calendar month which equates to £706.73 per week. This is effective from 29 September 2024 being the date specified on the Landlord’s notice.

Chairman: [NAME]: 10 March 2025

7 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, [NAME] 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 [NAME] 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

8 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, [NAME] 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 ([NAME], 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.