Upwards only rent reviews have been a constant characteristic of UK commercial property leases for decades.

The English Devolution and Community Empowerment Bill, introduced on July 10, 2025, proposes a significant reform to commercial leasing in England and Wales: a ban on upwards-only rent review clauses in new commercial leases. 

This unexpected inclusion aims to "make commercial leasing fairer for tenants, ensure high street rents are set more efficiently, and stimulate economic growth". 

The proposal, introduced without prior industry consultation, is currently in its earliest parliamentary stages.

The Bill mandates that rent review by reference to variables like market rent, notional rent, inflation, or tenant's turnover will no longer be restricted to an upwards direction or a minimum uplift. Instead, rent would be able to go up or down at review. Any lease provision attempting to restrict this would be overridden.

• This prohibition applies to "new commercial leases," defined as premises occupied for business purposes. It is not retrospective, so it will not affect existing leases or those granted under pre-existing agreements for lease. However, it will apply to lease renewals (statutory or agreed).
• Fixed stepped rents, with pre-determined increases, remain unaffected
• A key change is that tenants would be empowered to trigger or operate a rent review, even if the lease states this action should be taken by the landlord. This aims to prevent landlords from maintaining higher rents if the market falls.
• Future regulations may create exceptions, potentially allowing for mechanisms like "caps and collars" on rent adjustments.

The Governments impact assessment states the ban “could lead to a reduction in the amount of time a unit is vacant for especially large commercial units. This would support local authorities in reducing the blight of vacant buildings in their high streets and town centres. Blight of empty property units reduces a local community’s pride in place and can lead to further negative sentiment that may be damaging to the wider town centre and reduce the chance of filling other units. As such, by reducing vacancy and reducing blight – banning UORR clauses could have a positive social impact in reducing negative sentiment surrounding the town centre”.

LSH Viewpoint:

 Interestingly much of the justification for the legislation seems to be aimed at  mitigating retail vacancy levels and assisting town centre regeneration which is undoubtedly a laudable goal. 

However, the legislation will impact all commercial use classes including industrial and offices where the market dynamics and challenges being faced are very different to the retail sector.

But are upward only rent reviews really the villain of the peace? 

Most retail agents and investors will testify that over the past 15 years retailers have generally had the whip hand in lease negotiations resulting in shorter and more flexible leases and reduced rental levels. Indeed, leases of less than 5 years without rent review are commonplace. So, will downward review provisions have any real impact on town centre vitality?

Since 2019 Lambert Smith Hampton and REVO have produced an annual survey (embed link) reviewing the main issues affecting our town centres and gathering the opinion of industry experts across both the public and private sector. Interestingly, upwards only rent reviews have not been identified as a problem but respondents regularly state the main issues are the high level of Business Rates, the impact of Online Retail and an oversupply of shops. 

The proposed legislation fails to address any of these issues.

It remains to be seen the impact on the investment and lending markets but investors and banks typically value security of income and there is no hiding the fact this legislation potentially undermines this. The era of relying on predictable rental uplifts appears to be ending. Strong tenant covenants and active asset management will become critical to maintaining income levels.