A major reform is coming to commercial leases in England and Wales. The UK Government has proposed a ban on upwards only rent reviews in new leases. This aims to make leasing fairer for tenants and support economic growth.
What Is Changing
The proposed ban is part of the English Devolution and Community Empowerment Bill introduced on 10 July 2025. It will amend the Landlord and Tenant Act 1954 and is expected to take effect between 2027 and 2028.
Upwards only rent reviews allow rent to increase but never decrease. The new rule will ensure rents can adjust downwards during economic downturns.
Key Features of the Ban
- Applies to new commercial leases under the 1954 Act, including contracted out leases and possibly mixed use leases.
- Excludes existing leases and agreements made before the law takes effect.
- Prohibits rent reviews that only allow increases, including market, index linked, and turnover based reviews.
- Allows fixed stepped increases where rent rises are pre agreed.
- Prevents avoidance through side agreements or delays. Tenants will be able to trigger rent reviews and act if landlords stall.
- Rent collars setting minimum rent will likely be ineffective unless paired with caps or approved exceptions.
Impact on Landlords and Tenants
- Landlords may restructure leases using fixed uplifts or higher initial rents to manage risk.
- Tenants could benefit from fairer rent terms and flexibility during economic challenges.
- Investors may be cautious due to less predictable rental income.
What Tenants Should Know
- Lease renewals under the 1954 Act may be affected.
- Changes to lease terms or premises could trigger the ban through implied surrender and regrant.
- Tenants can initiate rent reviews, which is a new right under the proposed law.
Preparing For The Lease Reform
This reform could reshape commercial leasing in the UK. It is important for both landlords and tenants to:
- Review lease terms carefully
- Seek legal advice before signing or renewing
- Understand how the changes may affect future negotiations
Being prepared will help businesses make the most of this opportunity.
Legal Support For Commercial Lease Changes
Shweta Shinde is a Solicitor in the Commercial Property team based at our Chelmsford Office at Fisher Jones Greenwood LLP. For further information or to discuss your specific situation, please do not hesitate to contact our team using our online contact form or call 08455435700.