In July 2025, the Government proposed a ban on upwards only rent reviews. The English Devolution and Community Empowerment Bill (the “Bill”) is gathering momentum and has now concluded its Committee Stage in the House of Commons. An updated version of the Bill was released on 30 October 2025.
Overview of the Ban
This article provides updates to our previous article which explained that the proposed ban:
- Applies to any “business tenancy” as defined in the Landlord & Tenant Act 1954 (“1954 Act”)
- Will prevent upwards only rent reviews in commercial leases where the higher rent is not known at the time the lease is granted e.g. open market or indexation reviews;
- Will not apply retrospectively to existing commercial leases, but will apply to lease renewals;
- Does not affect stepped rent increases that agreed at the start of the lease;
- Includes a provision that tenants can trigger rent reviews, even if the lease says that the landlord must trigger the review.
Changes to the Bill
The latest version of the Bill includes a handful of amendments that address concerns raised on behalf of tenants. The changes include the following:
- An existing superior lease that requires any underlease to include an upwards only rent review will be effectively changed so that the intermediate tenant can grant a sub-lease on an upwards or downwards basis i.e. to comply with the ban. However, the existing superior lease can still contain upwards only reviews for that lease. This means the underlease and superior lease will have reviews carried out on a different basis, which is an anomaly.
- The definition of business tenancy is based on 1954 Act, but the Bill has clarified that any tenant does not need to be in “occupation” of the premises. This covers the concern that a tenant may not be in occupation itself where there is an underlease in place.
- Any lease renewal arrangements including options to renew (for either landlord or tenant) and agreements requiring tenants to take leases, which set rent reviews in a way that would defeat the ban, will also be prohibited. This effectively means the ban will cover both put options and call options.
What This Means
These amendments address issues raised on behalf of tenants about the draft Bill. It does not, however, do anything to address concerns raised by landlords and investors on this major change to rent reviews, which was effectively proposed without consultation. There are existing investments and agreements in place where an upward only rent review is a key part of the commercial and financial arrangement.
If the ban is implemented as drafted, we may see changes to commercial leases in practice such as: –
- Shorter lease terms and leases granted outside the security of tenure provisions, to avoid rent reviews and allow frequent renegotiation of the commercial letting
- Fixed rental increases every 5 years to be agreed at the start of the lease
- Adjustment to long-term valuations to take account of downward review in renewals, although it is not clear how valuation practices will take account of this change.
The timings for enactment of the Bill are not yet known and it may be some time before it becomes law. The Bill will now progress to the report stage and third reading, where it will be interesting to see if concerns raised by landlord investors will be addressed or ignored.
