Proposed Ban on Upwards-Only Rent Reviews
The Government intends to introduce legislation which will ban “upwards-only rent review” clauses in new commercial leases in England and Wales.- English Devolution and Community Empowerment Bill (introduced 10 July 2025)
This measure aims to help small business tenants who may be locked into rents that are above market level or inflated due to upwards-only clauses. The legislation intends to promote fairness between landlords and tenants, prevent business closure and help protect the high street.
The ban will catch business tenancies (under Part II of the Landlord & Tenant Act 1954) granted after the legislation comes into force, and also renewal leases under the 1954 Act that begin after that date. Leases in force before the legislation is introduced are not affected.
The ban will prohibit rent review clauses where the future rent is undetermined at the lease start, and is based on variable factors such as open market, inflation/index, turnover etc and which also limit the new rent to upwards only. Clauses that allow for both increases and decreases, or fixed/stepped rent uplifts which are agreed at the commencement of the lease are not caught.
The legislation will also give tenants the ability to trigger a rent review where currently only landlords do so. This aims to prevent landlords side-stepping the ban by delaying rent reviews.
It is not yet certain when the legislation will come into force, and the terms may change as it passes through Parliament. Landlords and investors are likely to be wary of the changes, and the industry may see a shift in lease structuring (higher initial rent, stepped rent increases, shorter terms, more breaks) as the market adapts.
Posted on 09/29/2025 by Ortolan