Move to ban upward only rent reviews
The UK government has proposed a ban on upward-only rent review clauses in new commercial leases as part of the English Devolution and Community Empowerment Bill introduced in July 2025
Draft legislation was introduced in Parliament on the 10th July 2025 proposing a ban on upwards only rent reviews in commercial leases, a long-standing feature of the property market. Landlords sought to have the reassurance in a commercial lease that the rent would only ever increase or stay the same as the rent being paid at the time.
What Are Upward-Only Rent Reviews?
These are clauses within a commercial lease to ensure that rent can only increase or remain the same at rent review dates. As such they do not allow the rent to decrease, even if market conditions are bad and rent is generally lower in the area. They’ve long been standard in UK commercial leases, offering landlords predictable income and supporting property valuations
The proposed legislation is set out in Schedule 31 of the English Devolution and Community Empowerment Bill (“the Bill”), which is currently at its second reading in the House of Commons. The measures would apply to England and Wales but will not have retrospective effect.
Why the Ban?
The government argues that such rent review clauses:
- can make rents unaffordable and cause shops to shut
- Punish small businesses and high street retailers
- Contribute to vacancies and urban decline
- Limit flexibility for tenants facing financial hardship
What the Bill Proposes
- Applies to new and renewal commercial leases in England and Wales
- Rent reviews must allow for upward or downward adjustments
- Anti-avoidance measures to prevent landlords from circumventing the ban
- Tenants may be allowed to trigger rent reviews if landlords don’t
The implications of the proposed changes will vary across different segments of the property market, and the drafting is expected to undergo substantial revisions and amendments as the Bill progresses through Parliament. As this Bill is at a very early stage there are lots of impacts that could vary and change a great deal of the Bill. However Landlords should keep an eye on how this progresses through Parliament as there are significant impacts for them in the future.
If you would like any more information relating to this article please contact Tony Chauhan on 020 8221 8011 or at tony.chauhan@bowlinglaw.co.uk
This article is not intended to provide legal advice; it is intended to provide information of general interest about current legal issues.
