Commercial property: UK Government announces plans to ban upwards only rent reviews

July 18, 2025

Commercial property: UK Government announces plans to ban upwards only rent reviews

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By Gareth Wedge

A surprise feature of a Bill that was presented in Parliament last week related to a ban on upwards only rent reviews.

This was only the first reading of The English Devolution and Community Empowerment Bill – so, there is some way to go.

However, if the provisions do come into effect, our commercial property experts have broken down the proposed changes and what it could mean for landlords and tenants

What are upwards only rent reviews?

Upwards only rent reviews are common in commercial leases. Essentially, a landlord has certainty that at the relevant review, the new rent will never be less than the starting or current rent – It might increase but it will never go down, even if there is a market downturn.

Proposed changes

Under the proposals:

• Upwards only rent reviews will be banned in commercial leases in England and Wales – regardless of how those leases are drafted. This means that the revised rent could end up being lower than the starting or current rent;
• This ban will apply to any upwards only review where the rent is unascertainable when the parties enter into the lease. This would cover market rent reviews and those linked to inflation and the tenant’s turnover;
• Stepped or fixed increases would be unaffected by the ban. A tenant can try to negotiate on these figures before signing on the dotted;
• Leases or agreements for lease that are already in place when the legislation comes into effect will not be subject to the ban;
• Once the legislation applies, it will affect lease renewals (whether statutory renewal or otherwise);
• Regardless of the terms of the lease, a tenant would have the ability of instigating the rent review provisions – to ensure that landlords cannot maintain the status quo during market downturns;
• The parties will not be able to contract-out of this ban or enter into a side agreement that goes against it.

Analysis – What could this mean for landlords, tenants and others?

From a tenant’s perspective and in an article published by the Ministry of Housing, Communities and Local Government, it was stated that upwards only rent reviews “…can make rents unaffordable and cause shops to shut”. Essentially, their position is that upwards only rent reviews might mean that tenants pay artificially high rents – notwithstanding a change in the market. Arguments are made that these higher costs are then passed onto the consumer and, if shops shut, this leads to socio-economic problems.

From a landlord’s perspective, there is concern that the ban will create uncertainty for property investors and lead to less confidence in potential investments and income projections. The ban will also be material to valuations carried out by lenders – who rely on borrowers’ rental income to service loans. An unintended consequence might be that landlords set higher starting rents or make use of stepped rents – to try to mitigate the risk of a drop in income if market conditions fall.

Alternatively, could it be argued that the effects will be less far reaching than anticipated? When the Labour Government previously criticised upwards only rent reviews in 2001, longer term leases were more common at that time. But now, it is not unusual to see some tenants entering into short term leases with no reviews. Could it, therefore, be the case that the very sector mentioned by the Government (to benefit from the ban) will not be greatly affected by the proposals after all? Time will tell.

We will follow this Bill and any changes made to it as it progresses through Parliament.

If you would like to discuss any of the above with one of our expert commercial property team, please contact us on 02920 829 100 or by filling in our Contact Us form.