Tribunal Sets New Fair Rent Under Rent Act 1977

OUTCOME: Allowed

FR27 First-tier Tribunal – Property Chamber File Ref No. LON/00AT/F77/2024/0250

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were 41c [ADDRESS], [POSTCODE]

[NAME] Mr [APPELLANT] JP

Landlord [COMPANY]

Tenant Mrs [APPELLANT] & Mr [APPELLANT]

1. The fair rent is 289.00 Per Week (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 1st November 2024

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

8. For information only:

(a) The fair rent to be registered is the maximum fair rent as prescribed by the Rent Acts (Maximum Fair Rent) Order 1999. The rent that would otherwise have been registered was £400.00 per week

[NAME] of decision 1st November 2024

FR27 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 388.6

PREVIOUS RPI FIGURE Y 257.7

X 388.6 Minus Y 257.7 = (A) 130.9

(A) 130.9 Divided by Y 257.7 = (B) 0.51

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) 1.56

Last registered rent* 185 Multiplied by (C) = 288.60 *(exclusive of any variable service charge)

Rounded up to nearest 50p = 289

Variable service charge NO If YES add amount for services

MAXIMUM FAIR RENT = £289.00 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.

Case Reference

: Lon/00AT/F77/2024/0250

Property : 41c [ADDRESS] [POSTCODE]

Tenant

: Mrs [APPELLANT] & Mr [APPELLANT]

Landlord : [COMPANY] of Objection : 27 June 2024

Type of Application : Section 70, Rent Act 1977

Tribunal

: Mr [NAME] Mr [NAME] JP

Date of determination and hearing venue : 1 [ADDRESS], [POSTCODE]

Date of Summary Reasons

: 1 November 2024

_______________________________________________

DECISION

The sum of £289.00 per week will be registered as the fair rent with effect from 1st November 2024 being the date the Tribunal made the Decision. ____________________________________ FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

© CROWN COPYRIGHT 2023

SUMMARY REASONS

Background

1. Following an objection from the Tenant to the determination of a fair rent by the Rent Officer, the Tribunal has made a determination under the provisions of the Rent Act 1977.

Evidence

2. The Tribunal has consideration of the Rent Officers calculations. The Tenant submitted written submissions. There was no evidence of rental levels for comparable properties in the area.

Hearing

3. A hearing took place at 10.00am on the 1 November 2024 which was attended by the Tenant’s daughter Mrs [APPELLANT]. She stated that her parents were very concerned by the most recent Rent Registration and confused by the fact that her parents in the meanwhile have received a notice of increase from the landlord for a figure of £188.96 per week, and the Tribunal consider this matter at the end of this decision.

Determination and Valuation

4. Having consideration of our own expert, general knowledge of rental values in the Brentford area, together with the Tenant’s submissions. The Tribunal considers that an achievable rent for a similar two-bedroomed property in a good marketable condition with reasonably modern kitchen and bathroom fittings, modern services with carpets curtains and white goods provided by the Landlord would be £625 per week. (£2,700 per month)

5. From this level of rent we have made adjustments in relation to: no white goods, no carpets or curtains, the general condition of the property and the tenant’s terms of the tenancy which equates to approximately 20%

6. The Tribunal has made an adjustment of 20% for scarcity as it considers there is a restricted supply of similar rental properties in the general area

7. The full valuation is shown below:

Market Rent £625 pw

Less

approx. 20%

£125 Terms and condition

Leaves

£500

Less Scarcity 20% £100

The Tribunal determines a rent of £400 per calendar week

Decision

8. The uncapped fair rent initially determined by the Tribunal, for the purposes of section 70, was £400 per week. The capped rent for the property according to the provisions of the Rent Acts (Maximum Fair Rent) Order 1999 is calculated at £289. per calendar week The calculation of the capped rent is shown on the decision form. In this case, the lower rent of £289 per week is to be registered as the fair rent for this property effect from 1st November 2024 being the date the Tribunal made the Decision.

9. It is often the case that market rents are in excess of those that may be charged by a [NAME] as it is a significant part of their remit to provide affordable housing. As such, depending on the type of tenancy agreement, their calculation of rent is [NAME] at a percentage of market rent or by way of index. Comparison is made with the open market rather than limited to other properties which are offered by [NAME].

10. It is assumed that the landlord will by usual convention of [NAME]’s not to seek to increase the rent to this figure as a result of this determination. It is assumed the rent will increase to £188.95 based upon the Government formula which is tied to inflation as set out in its notice of rent increase from [NAME] [NAME], the Chief Operating Officer at [NAME] dated 15 July 2024 as a result of this determination.

Chairman: [NAME]: 1 November 2024

APPEAL PROVISIONS

These summary reasons are provided to give the parties an indication as to how the Tribunal made its decision. If [NAME] 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 subsequent application for permission to appeal should be made on Form RP PTA