Are upwards only rent reviews going to be banned?
On 10th July 2025, the Labour Government introduced the English Devolution and Community Empowerment Bill into the Commons. This much talked about Bill included a surprise ban on upwards only rent reviews in commercial leases, something which will affect landlords and tenants across England and Wales.
When will the English Devolution and Community Empowerment Bill become law?
As yet, there is no indication as to when the Bill is likely to become law, or when there is to be a second reading. Parliament is in recess until 30th August 2025, so there can be no further movement until this time. It is also likely that the bill will require considerable parliamentary discussion and time before it can be implemented.
It should be noted that the ban on upwards only rent reviews is not expected to be retrospective, so it will not affect existing leases entered into before the Bill comes into force
If an existing/pre-commencement commercial property lease is renewed in the future, then the ban would apply to this lease renewal.
What commercial leases would be affected?
The ban on upwards only rent reviews would apply to all business leases, whether or not they are contracted outside of the Landlord and Tenant Act 1954.
The ban will also apply to commercial rent reviews where the rent is not yet known, i.e. traditional market rent, index linked or turnover rent reviews. Stepped rents with pre-agreed increases will not be affected.
If the rent review clause contains upwards only wording, it will have no effect, and the new rent on review will be whatever figure would have been determined without the upwards only wording.
Why is the English Devolution and Community Empowerment Bill coming into force?
Although the issue and potential ban of upwards only commercial rent reviews was first discussed 25 years ago, successive governments have settled for non-mandatory provisions in the RICS code.
Recent government announcements suggest that the proposed ban will help reinvigorate high street leisure and retail. The stated policy aims are to “make commercial leasing fairer for tenants, ensure high street rents are set more efficiently, and stimulate economic growth”.
What issues could there be with the Bill?
There are a number of concerns related to the bill, particularly the ban on upwards only commercial property rent reviews. The British Property Federation has openly criticised the proposals as “interference in long established commercial leasing arrangements without prior consultation or warning”.
The problem for many is that upwards only rents are seen as critical for positive property valuations for both investment and lending. A ban of this nature could potentially undermine this long-established basis for property valuation, resulting in less investment in the very areas that the government says it is trying to help.
The likelihood is that we will see increased reliance on index-linked rent reviews, which would effectively guarantee an upwards only rent, unless inflation is negative over the rent review period, which would be unusual.
How can GA Solicitors help?
GA Solicitors has one of the largest teams of commercial property solicitors in Plymouth and is ranked as a leader in this field by The Legal 500. Whether you are a commercial landlord or tenant, we can provide sound advice on any legal obligations and ensure any investments are protected.
Call the commercial property team today on 01752 203500 or email me directly via davd.stone@GAsolicitors.com.
You may also be interested in reading our recent article on Martyn’s Law.
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