The UK Government has announced plans to ban upwards‑only rent review clauses in new commercial leases in England and Wales.
If the proposals become law, they will represent one of the most significant changes to commercial leasing practice in decades, affecting landlords, tenants, investors and lenders alike.
Umara Naseer, Solicitor in our Commercial Property Team at Bromleys, shares her expert insight into how employers can navigate disciplinary and grievance procedures with confidence, clarity and conviction.
What is an upwards‑only rent review, and why is it being banned?
An upwards‑only rent review clause allows rent to increase at review dates but prevents it from ever falling, even if market rents decline.
These clauses have long been a standard feature of UK commercial leases, providing landlords and investors with predictable income.
The Government’s position is that upwards‑only rent reviews can contribute to unaffordable rents during economic downturns, particularly on the high street.
The proposed ban forms part of the English Devolution and Community Empowerment Bill, introduced in July 2025, and is aimed at creating more flexible and market‑responsive rent structures.
What types of rent review clauses will be affected under the proposed ban on upwards‑only rent review clauses?
Under the current draft legislation, the ban would apply to any rent review mechanism where the future rent is not known at the outset and is prevented from decreasing.
This includes:
- Open market rent reviews
- Index‑linked rent reviews (such as CPI or RPI) where a minimum “collar” applies
- Turnover rent reviews with a guaranteed floor
If a rent review results in a lower figure than the existing rent, the rent must reduce accordingly.
However, fixed or stepped rent increases, where the uplift is agreed at the start of the lease, will remain lawful. These are expected to become more common if the ban is implemented.
When will the ban on upwards‑only rent reviews take effect?
The proposals are not retrospective. Existing leases will remain unaffected.
Based on current Government guidance and industry commentary, the ban is expected to come into force between 2027 and 2028, subject to the Bill completing its passage through Parliament.
As a result, some landlords may look to complete new lease arrangements before the commencement date.
Which commercial leases will be caught by the proposed ban on upwards‑only rent review clauses?
The ban will apply to business tenancies as defined by the Landlord and Tenant Act 1954. This is a broad definition and includes most premises occupied for business purposes, even where:
- The lease is contracted out of security of tenure
- The premises are used for mixed residential and business purposes
- The tenant is not physically in occupation (following recent amendments)
Importantly, the ban will also apply to lease renewals granted after commencement, including statutory renewals under the 1954 Act.
Will rent collars and caps still be allowed with the proposed ban on upwards‑only rent review clauses?
As currently drafted, rent collars (minimum rents) will be prohibited.
The legislation gives the Secretary of State power to allow limited use of collars through future regulations, but only where a corresponding rent cap is applied at the same time.
This is designed to prevent landlords from recreating upwards‑only rent reviews through alternative drafting.
Can tenants force a rent review under the new rules?
Yes.
One of the most notable changes is that tenants will gain greater control over the rent review process. A tenant will be able to trigger a rent review by written notice, provided the review date has not passed.
If a landlord delays, the tenant may serve a further notice requiring progress.
While this may be uncommon in practice, it represents a clear shift in favour of occupational tenants.
What are the practical implications of the proposed ban on upwards‑only rent review clauses for landlords, tenants and investors?
For landlords
- Potential impact on asset values and income certainty
- Increased use of stepped rents and shorter lease terms
- Greater emphasis on rent setting at the outset
For tenants
- Opportunity for rents to reduce in weaker markets
- More influence over the timing of rent reviews
- Need to carefully assess future rent volatility
For investors and lenders
- Valuation models may need revisiting
- Income streams may appear less predictable
- Lease length, break clauses and covenant strength will become even more important
How can Bromleys help?
The proposed ban on upwards‑only rent review clauses marks a fundamental change to how commercial leases are negotiated and valued. As the legislation develops, early legal advice will be essential for parties entering into new leases or planning future renewals.
The Commercial Property team at Bromleys advises landlords, tenants and investors across Tameside and Greater Manchester on commercial leasing strategy. We are happy to discuss how these proposed reforms may affect your property interests and how best to prepare for the changes ahead.
Speak to our team today. Call us on 0161 330 6821 or email bromleys@bromleys.co.uk for expert, confidential guidance.