Upward Only Rent Reviews: The Proposed Ban 

The Government has proposed a ban on upward only rent review clauses in commercial leases, marking a significant departure from long-established market practice.

The proposal was introduced without prior consultation as part of the English Devolution and Community Empowerment Bill on 10 July 2025 and has understandably taken many in the industry by surprise. 

What the New Rent Review Proposal Means for Commercial Tenants and Landlords 

Upward only rent reviews (UORR) have long been the norm in commercial leases, offering landlords and their lenders predictability and security by ensuring that rents can only stay the same or increase on review. 

According to a Government press release, they are banning them because:

“[they] pit landlords against businesses and can make rents unaffordable and cause shops to shut. This will help keep small businesses running, boost local economies and job opportunities and help end the blight of vacant high streets and the unacceptable anti-social behaviour that comes with them.”

But who will this really affect? 

The ban will apply to new business tenancies governed by the Landlord and Tenant Act 1954 (LTA 1954) – that is, leases where the tenant is in occupation for the purpose of their business (whether or not the tenancy is contracted out of the LTA 1954). It will not apply retrospectively, so existing leases with upward only rent review clauses will remain enforceable. However, it will apply to renewal leases after the ban comes into effect. 

Notably, the restriction isn’t limited to retail leases; it will cover all commercial tenancies, including offices, industrial properties, and mixed-use premises. 

That said, small landlords letting shops on typical 5-year terms without rent review provisions may see limited disruption. This means tenants with these leases are unlikely to benefit significantly from the ban. Many commentators have said that the greater impact is likely to fall on institutional investors, pension funds, insurers, and real estate investment trusts, whose long-term income models often rely on the certainty that upward only rent reviews provide. 

Additionally, as currently drafted, the Bill applies only to leases involving actual occupation, potentially excluding headleases or intermediate leases. This could create mismatches between rental income and liabilities. 

So, what exactly is being prohibited? 

The ban covers any form of upward only rent review – whether open market, index-linked, or turnover-based that prevents rent from falling. It also prohibits clauses allowing only landlords to trigger reviews and aims to stop avoidance through side agreements or alternative arrangements. 

What happens next? 

We expect landlords to increasingly adopt fixed rent increases, index linked reviews, or grant shorter leases without rent review provisions. Higher initial rents and landlord break clauses that allow for rent renegotiation may also become more common, shifting risk away from 

the rent review process itself. 

While it’s still uncertain whether the proposed ban on upward only rent reviews will be implemented, we’ll be monitoring the developments closely and keeping you updated. 

Additional Resources

• Commercial leases: heads of terms
• Development agreements explained
• Overage agreements explained
• Option & pre-emption agreements
• Land development collaboration agreements
• Guide to taking a commercial lease (tenants)
• Guide to granting a commercial lease (landlords)

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