Flat C Block C, Peabody Estate, Farringdon Lane, London EC1R 3BB LON/00AU/F77/2025/0144
DECISION
The sum of £220.00 per week will be registered as the fair rent with effect from 16 July 2025, being the date, the Tribunal made the Decision. ____________________________________ © CROWN COPYRIGHT 2023 FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) 2 FULL REASONS Background[1]On 11 October 2024 the Landlord applied to the Rent Officer for registration of a fair rent of £180.25 per week for Flat 9 Block C Peabody Estate, Farringdon Lane, London EC1R 3BB (the subject property).[2]The rent was previously registered on 26 June 2017 at £145.00 per week with effect from 6 August 2017. On 6 February 2025 the Rent Officer registered a fair rent of £216.50 per week with effect from 6 February 2025. This rent appears to have been the rent determined under section 70 of the Rent Act 1977 and was below the capped rent as provided for by The Rent Acts (Maximum Fair Rent) Order 1999.[3]By an email dated 3 March 2025 the Tenant objected to the rent determined by the Rent Officer and the matter was referred to the First- tier Tribunal.[4]The Tribunal issued Directions on 16 May 2025 setting out the timetable and the steps the parties were required to take in preparation for the determination of this case. The Law[5]When determining a fair rent the Tribunal, in accordance with section 70 of the Rent Act 1977 (the Act), 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 other defect attributable to the tenant or any predecessor in title under the regulated tenancy, on the rental value of the property.[6]In SpathHolme Ltd v Chairman of the Greater Manchester etc. Committee (1995) 28 HLR 107 and Curtis v London Rent Assessment Committee [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 3(b) that for the purposes of determining the market rent, assured tenancy (market) rents are usually appropriate comparables. (These rents may have to be adjusted where necessary to reflect any relevant differences between those comparables and the subject property).[7]The Rent Acts (Maximum Fair Rent) Order 1999 (the 1999 Order) provides the framework that places a ceiling on the maximum rent that can be registered. The calculation is based upon a formula that applies an increase in the monthly United Kingdom Index of Retail Prices to the previously registered rent. The Hearing & Evidence[8]A hearing was held on 16 July 2025 where the Tenant attended but there was no representative from the Landlord. Tenant’s Submissions[9]During the hearing the Tenant advised that him and his wife had maintained the property to a good standard. When they require Peabody to be involved, Peabody’s response times are slow.[10]The Tenant felt that the method of calculation contained within the legislation was not appropriate and that this should be changed. The Tribunal advised that this was not something that they could impact or change.[11]The Tenant submitted that they had provided a list of comparable fair rents from the government database and included this within their written submissions to the Tribunal.[12]The Tenant then went on to question or challenge the service charge that was in place for the property. The Tribunal advised that this was not a matter that this Tribunal could review. Should the Tenant wish to challenge their service charge then they should seek independent legal advice.[13]The Tenant provided additional submissions in relation to long response times when they had reported flooding issues to Peabody historically and other maintenance issues. The Tenant also mentioned that the property is on the third floor with no lift. 4 Landlords’ Submissions[14]The Landlord provided no written submissions to the Tribunal. Inspection[15]The Tribunal did not feel an inspection of the property was required and no request for an inspection was made by either party. Determination and Valuation[16]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 and will not consider the personal circumstances of the Tenant, as that is not a factor envisaged by the Act.[17]Neither party provided evidence of market rents in the area. Although the Tenant provided a list of properties in relation to the fair rent, these did not provide evidence of the market rent. Having consideration of our own expert, general knowledge of rental values in the area, the Tribunal consider that the open market rent for the property in good tenantable condition would be in the region of £600 per week.[18]From this level the Tribunal then adjusts the market rent to reflect the condition of the property as well as adjusting the figure to disregard any tenant improvements to the property. The full valuation with adjustments is shown after paragraph 20.[19]The next aspect to be considered is the issue of scarcity. The Tribunal was not provided with any specific evidence on this issue. However, the issue of scarcity is considered on the basis of the number of properties available to let and considering the demand for such properties and over a really large area. Neither party provided any specific evidence in respect of scarcity. Therefore, using our knowledge and experience we consider that in the wide geographical area of Greater London there is an imbalance between supply and demand and this impacts upon rental values. Accordingly, we make a deduction for scarcity of approximately 20%.[20]The full valuation is shown below. 5 £/week Market Rent 600 Less Tenant’s decoration liability ) 5% No curtains or carpets ) 5% No provision of white goods ) 5% 90 510 Less Scarcity approx. 20% 102 £408[21]The Tribunal determines a sum of £408 per week for the open market rent value of the property. Decision[22]The uncapped fair rent initially determined by the Tribunal, for the purposes of section 70, was £408.00 per week. The capped rent for the property according to the provisions of the Rent Acts (Maximum Fair Rent) Order 1999 is calculated at £220.00 per week. The calculation of the capped rent is shown on the decision form. In this case the lower rent of £220.00 per month is to be registered as the fair rent of this property.[23]The Tribunal should comment that the rent fixed by the Tribunal is the maximum rent and the Landlord may not charge a rent above that figure. However, in many cases when the Landlord is a Registered Social Landlord, the rent charge may be significantly less than the rent fixed by the Tribunal. As per the Landlord’s application, the Landlord was looking for a rent of £180.25 per week.[24]Accordingly, the sum of £220.00 per month will be registered as the fair rent with effect from 16 July 2025 being the date of the Tribunal's decision. Chairman: Mrs S Phillips MRICS Date: 16 July 2025 6 APPEAL PROVISIONS By rule 36(2) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013, the Tribunal is required to notify the parties about any right of appeal they may have. If a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber), then a written application for permission must be made to the First- tier Tribunal at the regional office which has been dealing with the case. The application for permission to appeal must arrive at the regional office within 28 days after the Tribunal sends written reasons for the decision to the person making the application. If the application is not made within the 28-day time limit, such application must include a request for an extension of time and the reason for not complying with the 28-day time limit; the Tribunal will then look at such reason(s) and decide whether to allow the application for permission to appeal to proceed, despite not being within the time limit. The application for permission to appeal must identify the decision of the Tribunal to which it relates (i.e. give the date, the property and the case number), state the grounds of appeal and state the result the party making the application is seeking. If the Tribunal refuses to grant permission to appeal, a further application for permission may be made to the Upper Tribunal (Lands Chamber).