Potential Ban on Upward-Only Rent Reviews?

Overview of proposed legislation

Introducing a proposed ban on upwards-only rent review clauses in commercial leases, the Government put forth the English Devolution and Community Empowerment Bill on 10^th July 2025 in the House of Commons.

The Bill proposes the introduction of a new schedule, to be inserted before Schedule 8 of the Landlord and Tenant Act 1954. Details of this proposed schedule are set out in Schedule 31 of the Bill.

Revised: Introducing a proposed ban on upwards-only rent review clauses in commercial leases, the Government introduced the English Devolution and Community Empowerment Bill to the House of Commons on 10 July 2025.

The Bill sets forth a schedule to be submitted before Schedule 8 of the Landlord and Tenant Act 1954. Details of this new schedule are set out in Schedule 31 of the Bill.

What Does the Bill Propose?

It proposes that that a lease cannot have upwards-only rent review provisions if the future rent is not known or cannot be determined at the time when the tenancy is granted. Landlords will have to choose whether to have:

• Fixed rents, or;
•  a review clause that allows rents to both increase and decrease

The ban will affect the following upwards-only rent reviews controlled by:

• Market rentIndex-linked rent (e.g. Consumer Price Index or Retail Price Index)
• Turnover rent
• Side-by-side rent

The changes will impact all business tenancies and applies to all leases, whether contracted out of the Landlord and Tenant Act 1954 or not, but it does not apply retrospectively.

The ban, however, may not impact leases in cases where the property is vacant, or if the tenant has sublet it out.  

This ban will apply to any rent review but “stepped” rents with increases or decreases that are predetermined during the lease term are not affected.

New Tenant Rights

Under the new Bill the tenant now has the right to trigger the rent review process rather than it being landlord only. The same applies to any dispute for expert determination.

This means that leases will no longer hold exclusive control on the landlord. It puts a tenant in control of triggering rent review and has more transparency into how much their rent can increase.

The Bill is only concerned with a minimum rent, meaning that if a cap has been put on the rent, then it will be valid. For example, if there is a cap on the rent at £150,000 and the index-linked rent should be £180,000, rent will remain at £150,000.

If the rent-review system would result in a lower rent, due to the rental market falling, deflation or a drop in the tenant’s turnover, the reviewed rent will be lowered to that figure. Variable rent reviews could still be used in leases, but insecurity looms for landlords due to the uncertainty that rent could fall below the initial rent value rather than increase.

When will this come into effect?

The Bills first reading commenced in the House of Commons on 10^th July 2025. There is no set date for the second reading at this stage. It may take around 6-12 months for the Bill to be lobbied and this means that the Bill could also be amended significantly during this process.

Why has this been introduced?

The Government deems that upwards-only rent reviews “pit landlords against businesses and can make rents unaffordable and cause shops to shut” and the ban 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.”

It is worth noting that back in 2021, the Commercial Rent (Prohibition of Upward-Only Reviews) Bill was put forward in the House of Commons. Since 2022 it has only reached the second reading and seems to have gone stagnant.

Blair’s Government also addressed such reviews as an issue but then settled for non-mandatory provisions in the RICS code.  It seems to have always been an issue to be addressed by members of Parliament but is yet to actually be introduced as a binding law.

Ireland banned upwards-only rent reviews back in 2010. However, the Irish ban does not affect index-linked rent reviews unlike this Bill, and there seems to be a lack of case law to expand on whether the ban will work or not. 

Industry Reactions and Implications

Criticism from the British Property Federation

The British Property Federation has criticised the Government in their approach with this Bill, explaining it is an “interference in long-established commercial leasing arrangements without prior consultation or warning”.

Possible Outcomes Should the Bill Pass

• Landlords may be forced to offer shorter lease terms and/or increase initial rent to allow for the inability to guarantee future increases.
• Landlords could increasingly seek to negotiate Index linked rent reviews (for example CPI/RPI + X%) because, although technically this wouldn’t prevent a ‘downwards’ rent review, it would seem very unlikely.
• As upwards-only rent reviews provide flexibility for landlords and security that their rent would be up to date with the market and inflation, this Bill is likely to impact the market by making it harder for tenants to find commercial property with a reasonable rent and term.

Many argue that there is no need to remove upward-only rent reviews since such reviews occur frequently, typically every 3-5 years, and recent leases now include tenant break rights.

Some leases also include shorter lease terms which, due to the length of time, do not need a rent review, potentially addressing that a Bill may not have any significant impact on the current commercial property landscape.

In addition, rent in the retail sector is now recently based on turnover-based rents and therefore introducing the Bill may not have an impact on the empty high street shops; the retail market may now have simply evolved past high street stores.

Final thoughts and next steps?

If the Bill is passed, it will be interesting to observe the practical implications. We could see a rush by landlords to try to tie tenants into longer leases, bucking recent trends for shorter terms. If the Bill, as it is intended, will not have retrospective effect, these may contain upwards only rent review clauses. However, there are limited circumstances in which a landlord could actually legally compel a tenant to agree to such terms.

How can Napthens Support?

At Napthens, our experienced Commercial Property team is closely monitoring the progress of the English Devolution and Community Empowerment Bill and its implications for commercial leases.

If you are a business landlord or tenant seeking clarity on your rights, we can provide:

• Strategic advice on drafting or renegotiating lease terms in light of the proposed ban on upward-only rent reviews
• Lease reviews to assess risk exposure and recommend adjustments before any legislation takes effect
• Representation in rent review disputes and expert determination procedures
• Guidance on structuring new lease agreements that remain commercially viable and compliant with future legal changes

With the legal landscape potentially shifting, it’s vital to act early. Contact us via our form to speak with an expert.