Upwards Only Rent Reviews: What the Latest Government Update Tells Us
The government recently surprised the property industry by announcing plans to ban upwards only rent reviews in commercial leases - a move that arrived with little consultation or clarity. More detail is emerging, and while some questions remain unanswered, the direction of travel is becoming clearer.
What We Know So Far
The proposed ban is now expected to come into effect around 2027–2028 and will apply to all leases under the Landlord and Tenant Act 1954. This includes those contracted out of the Act’s renewal provisions.
Importantly, this won’t be a retrospective change. It will apply only to new leases and lease renewals, which we assume also includes surrender and regrants.
The focus is on clauses that provide for market rent reviews during the lease term. This means fixed or stepped increases may remain unaffected, but index-linked reviews (RPI/CPI) could still be caught.
There’s also confirmation that ‘collars’ (minimum rent protections for landlords) won’t be viable workarounds as these will be made ineffective under the new rules.
Our Thoughts: Why This Matters
It’s fair to say that upwards only rent reviews have been a long-established part of the UK commercial lease model. Landlords value them for predictability, while tenants, when advised properly, tend to understand that reviews reflect wider market trends.
We’ve always believed that market forces are the most effective regulator. No landlord wants a property to sit vacant, not just because of lost income, but also because of holding costs, business rates, insurance obligations, and the reputational impact of an empty unit. That commercial reality has long ensured that rent levels remain broadly grounded in what the market will bear.
To suggest that upward-only reviews are a major driver behind high street vacancy feels like a simplification. Shifts in consumer behaviour, changes to how people live and work, and broader economic pressures play a more significant role.
What Might Happen Next?
From an investor’s perspective, this change, if it proceeds as expected, is likely to have a disproportionate effect on secondary and tertiary assets, particularly in locations with weaker tenant demand or shorter lease lengths.
Prime assets may become more attractive, with investors favouring security of income over the potential for long-term rental growth through review mechanisms. That could lead to an even sharper divide between top-tier and mid-tier commercial property.
It’s worth noting that these changes are still several years away, and a lot could change between now and then. However, for landlords, investors and tenants alike, it’s worth staying aware and preparing for the conversations that may come.
Our Commitment to Clients
At Jaggard Macland, we remain focused on helping our clients navigate change with confidence. Whether it’s rent review negotiations, lease renewals, or acquisitions and disposals, our advice is always tailored to the current market and to our clients’ long-term goals.
As more details emerge, we’ll continue to share updates and offer practical insight on what this means for your portfolio or business.
If you’d like to discuss how this could affect a specific property or lease, don’t hesitate to get in touch.