Heffernan, R (On The Application of) v The Rent Service

Factual and Procedural Background

The Appellant, a visually-impaired tenant dependent on state benefits, rented a two-bedroom flat in the centre of The City in March 2004 at £745 per month (later reduced to £695). He applied to Company A (the local housing authority) for housing benefit. Under statutory arrangements, Company A referred the matter to Company B so that a rent officer could decide the maximum rent eligible for benefit.

Rent officers issued two re-determinations (20 December 2004 and 25 May 2005). In each the contractual rent was accepted as neither “significantly higher” nor “exceptionally high”, yet the “local reference rent” (LRR) was set far lower (£433.34 and £455). The officers treated the whole of The City and part of its rural hinterland (thirteen neighbourhoods in total) as a single “locality.”

The Appellant sought judicial review, contending that the chosen locality was unlawfully broad. A Deputy High Court Judge quashed the re-determinations. The Court of Appeal (Judge Pill LJ, Judge Rix LJ, Judge Longmore LJ) reversed that decision. The Appellant appealed further.

Legal Issues Presented

1. Does paragraph 4(6) of Schedule 1 to the Rent Officers (Housing Benefit Functions) Order 1997 (as amended) allow a rent officer to define “locality” as an extensive conurbation and surrounding rural areas?
2. How do the cumulative criteria in paragraph 4(6)(a)–(c) interact, and in particular does sub-paragraph (b) restrain the geographical scope of a “locality”?
3. What evidential and analytical steps must a rent officer demonstrate when the choice of locality is challenged?

Arguments of the Parties

Appellant's Arguments

• The rent officers misapplied paragraph 4(6): each neighbourhood must individually satisfy sub-paragraph (b); simply designating “a broad geographical area” is impermissible.
• Sub-paragraph (c) sets a ceiling—once sufficient neighbourhoods provide the required mix of tenures and property types, the search for further neighbourhoods must stop.
• Neither officer supplied evidence comparing facilities in or accessible from each additional neighbourhood; their reasoning was cursory and relied unduly on non-statutory guidance.

Respondent's Arguments

• Paragraph 4(6) contains no upper size limit; rent officers have a wide margin of judgment.
• A single conurbation operates as one housing market: transport links render facilities across The City accessible, so a tenant could reasonably be expected to live anywhere within it.
• The officers followed long-standing national guidance designed to secure consistency in decision-making.

Table of Precedents Cited

Court's Reasoning and Analysis

• Majority (Judge Hope, Judge Scott, Judge Neuberger) held that sub-paragraphs (a) and (c) set the governing parameters: at least two contiguous neighbourhoods, but only as many as needed to provide the variety required by sub-paragraph (c).
• Sub-paragraph (b) acts as a check on every neighbourhood proposed for inclusion: if access to facilities is not comparable, that neighbourhood must be excluded.
• Once enough neighbourhoods meet sub-paragraph (c), the rent officer must stop; adding further neighbourhoods injects subjectivity and undermines certainty.
• The rent officers in this case began with the entire conurbation, relied on a circular describing a “broad geographical area,” and produced only general statements about transport and cohesion. They did not perform the step-by-step statutory exercise and offered no detailed comparison of facilities.
• Minority (Judge Rodger, Judge Walker) considered the statute placed no upper limit on size and the officers’ broad-brush approach was within their discretion.

Holding and Implications

APPEAL ALLOWED. The House restored the High Court order quashing both re-determinations.

Practically, Company B must reassess the Appellant’s claim using a lawfully defined locality. Prospectively, rent officers must conduct a neighbourhood-by-neighbourhood analysis, ceasing once the statutory mix of property and tenure is achieved. National guidance must be revised to reflect the narrower approach endorsed by the majority; failure to do so risks further determinations being quashed.