Shock Move on Rent Reviews: What could the proposed ban on upward-only clauses mean for commercial property?

The Government’s surprise proposal to ban upward-only rent reviews in commercial leases has sent ripples through the property industry.

Quietly included in the new English Devolution and Community Empowerment Bill, this long-mooted reform could now be set for reality—prompting concern from landlords and investors alike.

At its core, the move appears to be motivated by ambitions to revitalise town centres and reduce persistent high vacancy rates.

But the market has already evolved. In all but the most prime retail locations, traditional rent reviews have been largely replaced by shorter, more flexible leases—raising questions about whether the proposed reform will actually achieve its aims.

Head of Lease Advisory, Joe Walker, explores.

If passed into law, the change would represent a seismic shift in lease negotiations. It could flip the conventional dynamic between landlords and tenants on its head.

How will rent review changes affect landlords and tenants?

Tenants might see this as an opportunity to push for longer lease terms as rents will be able to fluctuate up and down with the market, as would be the case with a lease renewal.

Landlords, in contrast, may resist such arrangements and instead favour contracted-out tenancies or shorter terms to preserve flexibility and control. Longer leases have historically presented income security, and the removal of upwards rent reviews, removes an element of the income certainty.

Conversely, it is not a stretch to imagine that landlords will be resistant to longer lease terms, and contracted out tenancies may well become more prevalent as landlord seek to retain an element of control.

In the round, this could amount to a wholesale reversal of the landlord and tenant approach to this aspect of renewal negotiations.

This could mean a fundamental rethinking of how leases are structured, negotiated, and renewed. Until more detail is released, much remains unclear.

• Will the ban apply retrospectively, or only to new leases?
• How will index-linked rent reviews be treated—technically not upward-only, but often functioning in a similar way?

With so few details available, uncertainty is already impacting investor sentiment—particularly at a time when confidence in the commercial property sector is only just beginning to recover.

Any resulting drop in values could have unintended knock-on effects, particularly for pension funds and indirect investors.