Government proposes ban on upwards-only rent reviews in commercial leases
On 10 July 2025, the Government published the first reading of the English Devolution and Community Empowerment Bill. The Bill is intended to transfer power out of Westminster by devolving more powers to local government by making changes to democratic processes and funding streams.
It is therefore surprising that the Bill also includes an unexpected ban on upwards-only rent reviews (UORR) in commercial leases. The relevant provisions are tucked away at the very back of the Bill, and were not mentioned in the preceding White Paper or in the run-up to the introduction of the Bill.
The ban on UORRs will apply to most new tenancies which qualify as business tenancies within the Landlord and Tenant Act 1954 (and licensed premises which don't normally fall within the 1954 Act), where the rent is reviewed by reference to the market, an index, or tenant turnover.
Where the ban applies, the new rent will be determined by the relevant market, index or turnover without a floor on the relevant rent. Tenants will also be able to trigger rent reviews usually reserved to landlords, and to take 'operational action' needed to make the rent review operate effectively.
The ban will not apply to tenancies which predate the ban, tenancies with fixed rents throughout the duration of the term, or tenancies with stepped rents agreed in advance.
At the time of writing, the Bill has only passed the first reading in the Commons, and the ban may be amended or removed entirely before the Bill becomes law. Practitioners, landlords and tenants will therefore want to keep a careful eye on the Bill as it progresses (particularly given the lack of publicity to date), and time any new leases accordingly.