The Government have this month introduced a new bill (English Devolution and Community Empowerment Bill0 which proposes a fundamental reshaping of the commercial leasing landscape in England and Wales. Tucked into this bill is a provision to ban upwards‑only rent review (UORR) clauses in new commercial leases and lease renewals, signalling a significant shift in landlord‑tenant dynamics.
What is an upwards‑only rent review clause?
In long‑standing commercial lease agreements, UORR clauses ensure that during rent reviews, the rent can only stay the same or increase, never decrease, even if market conditions have softened. This clause offers a safety net for landlords against market falls yet often locks tenants into inflated rents during downturns.
Scope of the proposed ban
- New leases and renewals: Applies only to leases granted after the law commences (including renewals under the Landlord and Tenant Act 1954).
- All business tenancies: Covers premises occupied by business tenants, whether security of tenure applies.
- Types of rent reviews affected: Covers market‑rent reviews, index‑linked reviews, turnover‑based rent, or any formulaic clause where final rent isn’t predetermined at the outset.
- Exemptions: Excludes fixed, stepped, or predetermined rents. Agricultural leases may be exempt under future regulations.
How it will work in practice
Even if a lease includes an upward‑only review clause, it will be rendered unenforceable once the law takes effect. At review, the rent must align with the agreed mechanism—whether that leads to a higher, the same, or lower rent.
Anticipatory anti‑avoidance measures empower tenants to initiate reviews, removing any landlord control over triggering reviews.
Why now, and how the timing unfolds
- Government timing: The provision was introduced unexpectedly on 10 July 2025, with no prior consultation, embedded within a broader devolution bill
- Legislative process: Currently in Commons, the bill will need further readings, consultation, and potentially revision. Progress remains unpredictable and heavily influenced by industry lobbying.
- With parliamentary recess soon (23 July – 29 August), the bill is unlikely to advance until autumn.
Strategic rationale and expected impact
Tenant support: The government frames the ban as a market‑corrective measure to help small businesses and high‑street retailers avoid rent hikes at review, contributing to town centre regeneration.
Addressing vacancies: With rising commercial rent pressures blamed for high vacancy rates and antisocial consequences, reform aims to inject flexibility and affordability.
Concerns from the sector
- Landlord/investor concern: The British Property Federation lambasts the move as intrusive, lacking consultation, and a threat to market confidence.
- Questioning the impact: Legal commentators note reduced lease lengths and fewer rent‑review clauses in modern deals. They argue the practical impact on high‑streets may be limited.
- Potential market shift: Landlords may prefer fixed rents, shorter leases, or alternative rent structures, potentially negating reform aims.
- Investment valuation risk: Pension funds and institutional investors argue UORRs support finance and risk management; their removal could revalue assets.
Key takeaways for stakeholders
- For tenants: A powerful negotiating position is emerging. Prospective tenants should anticipate flexible, market‑reflective review clauses and ensure proper review triggers are drafted in.
- For landlords: Rethink structures to maintain investment appeal, consider fixed rents, caps/collars, shorter terms, or index-linked reviews.
Conclusion: A pragmatic pivot or overreach?
The proposed UORR ban marks a bold, tenant‑focused pivot in commercial lease policy. If enacted, it could relieve small business cashflow pressures and promote dynamic high‑streets.
At the same time, it risks unsettling investor confidence, reshaping rent‑review practices, and may encourage moves toward fixed rents or shorter leases potentially reducing flexibility for tenants themselves.
How Ison Harrison can help
At Ison Harrison Solicitors, we’re ready to help clients navigate this pivotal change in commercial leasing. Whether you’re a landlord reassessing your investment strategy or a tenant seeking fairer lease terms, our expert property team can guide you through the implications of the proposed UORR ban. From bespoke lease drafting to strategic advisory services, we offer practical, commercially-minded support to help you stay ahead.
Get in touch today to future-proof your leasing arrangements and turn legislative change into opportunity.
