Rent Reviews – what are the proposals and possible impacts?

Upwards-only rent reviews are a common feature in commercial leases and commercially accepted as industry norm.

Upwards-only rent reviews are a mechanism in commercial leases that ensure the rent payable by the tenant cannot decrease below the current passing rent, even if market conditions would have otherwise dictated a lower rent.

The principle is geared towards protecting landlords from the financial risks associated with long term leasing in ever changing market conditions.

To balance this tenants’ agents will seek to agree tenants break clauses to tie in with rent review dates or a structure of collars (minimum rental increases and cap maximum rental increases) to provide some flexibility to the tenant whilst preserving the upwards-only principle.

Upwards-only rent reviews have recently been subject to criticism for their rigidity and potential to impose an additional financial burden on tenants in uncertain rental markets.  Such burden could result in the failure of the tenant’s business leading to insolvency.

On 10 July 2025, the UK Government published its “English Devolution and Community Empowerment Bill”. Within the Bill is section 71 which has been included to preclude certain terms in commercial leases, this includes upwards-only rent reviews. Now this has been subject of many discussions over the years but due to the implications of interfering with commercially agreed terms between the landlord and the tenant has seen no meaningful action.

The Bill has only just been introduced and will require much thought and further discussion as well as scrutiny by Parliament and industry stakeholders.

Any proposal to introduce such ban will have a huge impact on the commercial property market in the broadest sense.

On the face of it the Bill will seek to sit alongside the Landlord and Tenant Act 1954 (LTA 1954) and apply to all leases that the LTA 1954 applies irrespective of whether the lease was contracted out or not. The Bill would not act retrospectively and only impact leases entered into after the new law comes into place.

Whilst at very early stages one to keep a close eye on over the coming months for both landlords and tenants negotiating lease terms.