Legal update: The ban on upwards only rent reviews

July 2025 marked an important moment for commercial landlords and tenants as Schedule 31 of the English Devolution and Community Empowerment Bill provided for a proposed ban on upwards only rent reviews in business tenancies. 

The government’s rationale behind introducing this is to encourage more competitive rents to be set for businesses, in the hopes of generating improved profits for tenants who, in turn, should be in a position to offer value for consumers.

The Bill is currently at the Committee Stage of the House of Lords and its potential effects are already the subject of much discussion throughout the real estate sector. While tenants may welcome the proposed removal of upwards only rent review provisions, the concerns for landlords and investors are that the proposed changes introduce uncertainty into investments and the market. 

What tenants and landlords can expect

So, what will the proposed ban actually do, and who will it affect, if passed? In this article, Bri Cheng, solicitor in our real estate team, sets out some of the key takeaways from the Bill:

• the ban will only affect leases occupied for the purposes of a business (and other purposes), although not-for-profit business will not be affected;
• leases entered into before the date on which the ban comes into effect will not be affected, nor will leases that are granted pursuant to any agreement/contract entered into before this date. However, any leases granted pursuant to an option to renew contained within a lease granted on or after 17 March 2026 will be subject to the ban;
• any rent review mechanism that is linked to either open market rent value, any inflation or index link/multiplier (e.g. the retail prices index) or the turnover for the business operated from the relevant property, must allow for a downwards review;
• fixed or stepped rent increase will not be subject to the ban and we may find a greater reliance on such rent increase methods in leases; and
• there may be a greater reliance on shorter term leases with no rent reviews to give landlords certainty as to rental levels for the duration of the lease term. There is also a question as to whether leases may be set at artificially high rates to circumvent the need to implement a rent review.

Expert legal support

The Bill is moving closer to receiving royal assent and, given its proposed retrospective effect in the case of leases granted pursuant to options in leases granted on or before 17 March 2026, commercial landlords/investors need to be actively considering the implications of the proposed ban now. If you’d like advice on the potential impact of the Bill on your commercial lettings plans for the near future, our real estate team are here to support you.

For more information on anything discussed in this article, contact Bri Cheng using [email protected] or 0191 211 7892.