Social Housing Speed Read: Rent Determination
15th January, 2025
In this week's social housing speed read we consider the two recent Tribunal appeals on rent determination in Kensington Avenue Ltd v Curlin (2024) UKUT 341 (LC) and Rylands v Hopkins & Anor (2024) UKUT 276 (LC).
Whilst neither decision carries any substantial judicial consideration, they are useful decisions to consider in light of the Renter’s Rights Bill. We published a speed read on this in September which can be found here.
Kensington Avenue Ltd v Curlin (2024) UKUT 341 (LC)
Case Summary
This case addressed the determination of a “fair rent” for a tenant under the Rent Act. The landlord, dissatisfied with a valuation officer’s assessment, escalated the issue to the First-Tier Tribunal (FTT). The landlord presented detailed evidence of comparable one-bedroom flats in the area, with rents ranging from £3,445 to £4,312 per month, submitting that the fair rent ought to be £2,492 per month.
The FTT’s decision
The FTT concluded that:
- Market rent should be £2,600 per month
- Adjustments of 35% and 20% should be made due to the property’s condition and for scarcity, respectively
- Fair rent should be £1,352 per month
The Appeal
The landlord appealed on the basis that the FTT had failed to provide reasons for its conclusion on market rent and disregarded the Landlord’s schedule of properties. The Upper Tribunal agreed stating it was not possible to understand why the FTT took the view that the fair market rent was £2,600 per month when the Landlord’s comparables indicated a higher figure.
This links back to the earlier 2015 case of Israel Moss Children’s Trust v Bandy [2015] UKUT 0276 (LC) in which it was held that in determining fair rent:
“…the reasons need not be elaborate or lengthy but they must be intelligible and deal with the substantial points which have been raised. Having read the reasons the parties should be able to understand why the decision has been reached.”
Rylands v Hopkins & Anor (2024) UKUT 276 (LC)
Case Summary
Here, the landlord proposed raising rent from £900 to £1,050 per month. The tenant applied to the FTT.
The FTT’s decision
The FTT found that:
- Had the property met open-market standards, the market rent would be £1,100 per month
- Due to the property’s poor condition, including the lack of a fridge and washing machine, a dated bathroom and general disrepair, a deduction of £90 per month would be made.
The Appeal
The tenant appealed this decision on the basis that the FTT failed to consider that the property did not have a valid EICR and that the Landlord had carried out electrical works himself, leaving them in a dangerous state for a prolonged period.
The Upper Tribunal found that the FTT had failed to take this into consideration, and provide reasoning for the assessment of the market rent. For this reason, the case was remitted back to the FTT for fresh consideration.
Key Takeaways
Tribunal Standards: These cases demonstrate the Upper Tribunal’s insistence on robust and transparent reasoning from the FTT when determining market and fair rents.
Property Condition: The FTT appears inclined to apply substantial reductions based on property conditions, signalling the importance of landlords maintaining their properties.
Renters’ Rights Bill: With the Renters’ Rights Bill expected to enhance tenant protections and limit rent increases, these rulings highlight the growing scrutiny on fair rent determinations and the condition of rental properties.
Landlords should ensure their properties meet required standards and prepare well-documented evidence for tribunal proceedings. At the same time, tenants can take reassurance in the emphasis placed on property condition and the clarity of tribunal decisions.
If you have any questions about anything discussed in this speed read, do not hesitate to contact one of our expert Social Housing lawyers.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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