What the proposed ban on upward-only rent reviews means for landlords

Surprise plans to ban upward-only rent reviews in commercial leases have been unveiled by the government as part of new proposed legislation.

The proposed changes to a longstanding practice for landlords across the country, hidden within the new English Devolution and Local Recovery Bill, could mark a significant change to how commercial rents are structured in the future

Michael Tatters, Thrings’ Head of Property Litigation takes a look at what the proposals want to change and what should landlords be thinking about now.

What are upward-only rent reviews

Upward-only rent reviews (UORR), a market standard provision in commercial property leases, ensure commercial rents will never drop following a review, placing the full risk of economic downturns on tenants, as opposed to landlords.

What's in the proposal?

Under the draft legislation, the government is aiming to make upward-only rent review clauses unenforceable in new commercial leases. That means:

• Landlords will no longer be able to restrict rent reviews to upward movements only;
• Rent could move up or down, depending on market conditions;
• The ban would apply to all new commercial leases, and potentially to lease renewals under the Landlord and Tenant Act 1954;
• It won’t affect existing leases – but it will apply once those leases come up for renewal.

The intention, according to the government, is to increase flexibility and affordability for tenants, particularly small businesses on the high street. While the aim may be to stimulate commercial activity in towns and cities, many landlords are understandably concerned about the potential financial implications.

Why this matters to landlords

UORRs have long been seen as a way to protect income and reduce uncertainty. Removing this option introduces new variables into lease negotiations and long-term asset management.

In practice, this could mean:

• Reduced rental income certainty, particularly for longer leases;
• Valuation adjustments, as rent reviews become less predictable;
• Greater negotiation around review clauses, especially in secondary or more volatile markets;
• Financing challenges, where lenders have previously relied on predictable, inflation-linked cashflows.

Put simply: for landlords, this change could introduce new commercial risks. And while the policy has not yet passed into law, its direction of travel suggests change is on the way.

What landlords should be doing now

Although the Bill is still making its way through Parliament, it’s important to be prepared. Whether you’re reviewing your lease portfolio or negotiating new terms, early action could help reduce uncertainty later.

Here are a few practical steps landlords may want to consider:

Review upcoming leases and renewals - Identify leases that are due to be granted or renewed within the next 12–18 months and consider whether it’s appropriate to proceed with upward-only clauses, or explore alternatives.

Explore flexible rent review models - Fixed increases or stepped rents may offer more predictability in the short term and, where rent reviews are necessary, ensure the clause allows for upwards and downwards movement, and that the method of valuation is clearly set out.

Revisit lease templates - Be aware that any standard leases still including UORR clauses may need to be revised soon. Consider building in collars or caps to manage risk while remaining compliant with the likely new rules.

Monitor progress of the legislation - The proposals are still in draft form, and could change, either in scope or implementation. Seeking legal advice before making major commercial decisions based on anticipated law changes will give you the clarity and reassurance you need to ensure you are making the right decisions.

Thrings’ Property Litigation lawyers are experienced in reaching resolution in property disputes, acting for both landlords and tenants, often without recourse to court proceedings, and with an excellent track record when cases do go to Court. To find out more, get in contact.