18 Jul 2025
The Proposed Reform in Brief
On 10 July 2025, the UK government introduced the English Devolution and Community Empowerment Bill, which includes a provision banning upward‑only rent review clauses in new commercial leases and leases upon renewal in England and Wales. Existing leases signed before the legislation will remain unaffected.
From its implementation, landlords must choose one of two options:
The Royal Institution of Chartered Surveyors (RICS) has acknowledged the strong views on both sides of the debate but cautioned that the ban “must not create market uncertainty at a time when many businesses need confidence,” emphasising that current leasing practices are already evolving, shorter and more flexible term structures, clear review mechanisms, and tenant/landlord trigger rights are increasingly common.
The RICS advocates for clarity, transparency and widespread adoption of its professional standards, which calls for straightforward, comprehensible rent review clauses allowing either party to initiate a review. While supportive of fair and market-responsive leases, RICS remains opposed to prescriptive legislative bans, instead urging industry-led best practice and engagement with government during the Bill’s consultation stages
Benefits: Who and What Stands to Gain?
Tenants will no longer be locked into long leases with escalating rents even when market conditions soften. This supports high‑street SMEs and retailers with tighter margins.
With rent able to fall in downturns, review mechanisms are more responsive to economic shifts, potentially reducing cases where struggling tenants feel pressured to close.
Lower volatility in rents could reduce vacancies and antisocial behaviour tied to empty shops, supporting local economies and community hubs.
Risks & Drawbacks: What Market Players Fear
Without guaranteed rental growth, landlords and institutional investors face greater uncertainty over future cash flows, potentially impacting valuations.
Landlords may respond by offering shorter lease durations (e.g. 3–5 years vs 10+), requiring higher initial rents, or using stepped/fixed rent increases instead of market-linked ones.
The likelihood of rent review disputes may rise. Tenants can trigger downward reviews, and parties may argue intensely over market rent, raising costs and negotiation time.
Lenders and developers may reassess risk models. Projects relying on predictable income may face higher borrowing costs or reduced feasibility.
What Happens Next – And What Should Stakeholders Do?
The Bill is at the first reading stage and could take 6–24 months to pass into law. Significant debate, lobbying, and amendments are expected during this time.
Landlords & Investors:
Tenants & SMEs:
Final Thoughts
The proposed ban on upward‑only rent reviews is a landmark shift in the UK’s commercial leasing landscape. It aims to balance tenant protections and high‑street revitalisation with long-standing landlord and investor models of income stability.
While it offers promise for greater fairness in some sectors, it also brings risks of market disruption, shorter leases, and evolving rental strategies. The final outcome will likely hinge on how the legislation is refined through consultation and parliamentary debate and whether workable compromise mechanisms like caps, collars, or exemptions are adopted.
How SMC Brownill Vickers Can Help
At SMC Brownill Vickers, we combine market insight with decades of experience in commercial lease advisory and rent review negotiations. As the market adjusts to the proposed ban on upward‑only rent reviews, our team is ideally placed to guide both landlords and tenants through the changing legal and commercial landscape.
Whether you’re reviewing your existing lease portfolio, preparing for renewal negotiations, or exploring more flexible rent structures, we offer bespoke advice, accurate valuations, and strategic support to protect your interests and maximise value.
Get in touch to discuss how we can help you navigate this evolving environment with confidence.
