Here is a copy pasted email of the info sent to me by the VOA on how they assess a 'fair' rent. I am unsure if there has been legislation change which would interfere.
"As I haven’t registered the rent for your property, I can only advise on what a Rent Officer considers when assessing a fair rent for a property with a tenancy protected under the Rent Act 1977.
When assessing the fair rent for a property, the Rent Officer has to consider the market rents in the area considering where the property is located by looking at our market evidence database and the knowledge of the area and to arrive at the Open Market rent for the property.
From the open market rent under Section 70, the Rent Officer makes adjustments for the condition of the property and the tenant’s liability for decoration/repair and maintenance, no furniture, white goods.
The Rent Officer has to also consider Scarcity– this is to consider the imbalance in the open market rent due to supply and demand of properties. So if there is a shortage of properties, it could mean that the open market rent is inflated and so the Rent Officer has to make adjustments for this from the open market rent.
The Rent Officer after making all these deductions comes to what is called the Uncapped Rent.
Where there’s been no improvements or repairs by the landlord since the last registration, then the rent is then further capped under the Maximum Fair Rent Order (1999) Capping Provisions, where the increase in rent is based on the difference of RPI (retail price index) since the last registration and the current registration plus 5%. The rent registered by the Rent Officer is the maximum recoverable rent by your landlord
As an example, the last registration in 2013 for your property was assessed as follows:
Open Market Rent: £500 per week
Adjustments from the open market rent: £125 per week
Scarcity: £30.00 per week
Uncapped Rent: £345 per week
Capped (Maximum Fair Rent Capping Formula) and the registered rent: £138.50 per week.
There is a lot of information here but you may also refer to the Valuation Office Agency website under VOA Rent Officers for further information.
Once the rent has been registered for your property, you may also ask for the breakdown of my valuation, which has to be in writing."