The end of upwards only rent reviews? What the proposed ban means for commercial property stakeholders

Posted: 16/07/2025

On 10 July 2025, the government introduced the English Devolution and Community Empowerment Bill to Parliament. Somewhere at the back of this long bill, ostensibly designed to deal with devolution, is a provision which, if enacted, could have a profound impact on the commercial real estate sector – a ban on upwards only rent reviews (UORRs) in commercial leases. Here’s what commercial landlords and investors need to know about these proposals.

Key features

• Scope: the ban on UORRs applies to all leases to which Part II of the Landlord and Tenant Act 1954 applies. In other words, it will apply to all leases held by an occupying tenant for business purposes – regardless of whether the lease is contracted out of the 1954 Act. The restriction applies equally to new leases and to lease renewals, whether statutory or agreed.
• Prospective: the ban is not retrospective, so it does not affect leases that are entered into before the bill comes into force or leases entered into pursuant to pre-commencement agreements for lease.
• Rent review mechanisms affected: the ban targets any rent review mechanism structured to allow upward movement only where, on the date that the lease is granted, the new rent is not known and cannot be determined. So, the ban will capture open market, index-linked, and turnover-based reviews; it will not affect stepped rents with pre-agreed increases.
• Effect of the ban: if a rent review clause contains an upwards only provision, it will be of no effect. In other words, even if a lease contains an upwards only provision, the rent can move either up or down on review.
• Exemptions: under the bill, the Secretary of State is granted a regulation-making power to define exceptions to the ban.  For example, these may allow for caps and collars to be used where a lease is contingent on development and the landlord or tenant wish to use caps and collars to provide greater certainty on the parameters of rental increases or decreases.
• Anti-avoidance measures: the bill includes broad anti-avoidance provisions, so lease terms (or other arrangements, such as put options) aimed at avoiding the ban will be void. Also, to avoid landlords delaying reviews that might result in a reduced rent, the Bill gives the tenant the power to trigger rent reviews and/or take action to progress reviews (even if the lease doesn't).
• No Contracting Out: parties cannot contract out of the ban. 

Examples

Here are some examples showing the agreements that we anticipate will be banned by the bill and those that will not be affected.

What are the implications for the leasing market?

• Early impact on negotiations: even before the bill becomes law, expect tenants to push for upwards downwards reviews.
• Higher starting rents: to protect against the potential for downward review, landlords may begin setting initial rents at levels above current market rates.
• Lease structuring: to mitigate the risks, landlords may grant shorter leases without security of tenure or rent review provisions. In return, landlords will need to make sure that premises are attractive to tenants, otherwise they risk having vacant premises.
• Rent reviews: landlords may turn to fixed or stepped rent review increases (which are permitted under the bill). Alternatively, they may push for index-linked rent reviews – accepting the risk that rents may fall, but mitigated by the fact that it is rare for the RPI or CPI to decrease over an extended period. 

What is the timing on this?

The bill has only just had its first reading in Parliament and the government did not consult in advance of introducing the bill, so it will now have to contend with market reaction and extensive lobbying, all of which will delay its passage. Moreover, even if the bill does pass in its current form, we anticipate legal challenges to the ban, such as the one currently in the courts concerning the Leasehold and Freehold Reform Act 2024, which would introduce further delay.

What should landlords do next?

Landlords do not need to change their practice immediately. However, it would be prudent for landlords to begin considering the following steps:

• Model the impacts of the proposed ban on their property and loan valuations (which may be predicated on UORRs). Bear in mind that UORRs in existing leases and in leases granted pursuant to pre-commencement agreements for lease will remain valid even after the bill becomes law. 
• Audit lease portfolios: identify leases due for renewal or re-gearing and assess how the proposed changes might affect your position. 
• Engage early: brief agents and asset managers to expect an increase in requests for upwards downwards rent reviews from tenants.  While early rejection of requests may be feasible, consider adapting your approach as the bill progresses through Parliament.  
• Monitor the Bill’s progress and engage as necessary: the bill is still in its  early stages, with no confirmed date for a second reading. There will be opportunities to lobby on the bill and to respond to government consultations.

Final notes

With the start of the parliamentary recess nearly upon us, we anticipate few public developments between now and when Parliament returns on 1 September.  Our commercial real estate team will be keeping an eye on developments, so please let us know if we can help. 

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