The current position
Most commercial leases include rent reviews every few years. Traditionally, these are “upwards only”, meaning rents can rise or remain the same but never fall. Reviews are usually linked to open market rent or inflation.
While this protects landlords from declining rental values, it often leaves tenants paying above-market rents during downturns. For businesses, particularly in the retail sector, this can create financial pressure at already challenging times.
The Government’s proposal
On 10 July 2025, the Government announced plans to ban upwards only rent reviews in new commercial leases as part of the English Devolution and Community Empowerment Bill.
The stated aim is to revitalise the high street, create fairer leasing arrangements, and support small and medium-sized businesses by ensuring rents reflect market conditions.
The ban will not apply retrospectively but will cover both new leases and renewals. Agreements for lease signed before the legislation takes effect will not be affected. Rent reviews linked to market rent, turnover, or inflation will fall under the ban, while fixed stepped rents will remain permitted.
To prevent avoidance, tenants will also gain the right to trigger rent reviews, even where leases currently reserve that right to landlords.
Concerns and market reaction
The lack of consultation with landlords, tenants or stakeholders has raised concern that the measure is being rushed. Removing upwards only rent reviews may reduce the appeal of commercial property as an investment, as predictable income streams have historically underpinned valuations and financing.
Likely consequences
If the ban comes into force, landlords may seek to protect their income by:
• Increasing fixed rents: using stepped rent increases at pre-agreed levels.
• Favouring index-linked reviews: tying rents to inflation rather than property values.
• Setting higher initial rents: to offset any potential decreases in future reviews.
• Including more break clauses: to enable landlords to reset rents during a lease.
• Granting shorter leases: following the post-COVID trend of short-term retail leases without security of tenure. While flexible for tenants, shorter leases often carry higher annual rents.
• Varying existing leases: amending terms before the legislation takes effect.
Tenants are likely to welcome the move, viewing it as a step towards fairer and more sustainable rents. Landlords, however, may feel it undermines property values and disrupts financing models, leading to tighter lease structures.
What does this mean for landlords and tenants?
The proposed ban has not yet been timetabled for a second reading in Parliament, so the timing remains uncertain. However, landlords should begin reviewing their property portfolios now. Key considerations include:
• assessing the impact on valuations,
• considering alternative rent review mechanisms, and
• reviewing renewal or variation options before the ban takes effect.
For tenants, the proposal may provide opportunities to negotiate fairer terms on both new leases and renewals.
How BPE Solicitors can help
At BPE Solicitors, our Commercial Property team in Cheltenham advises landlords, tenants, investors and developers across Gloucestershire and the South West on all aspects of leasing, rent reviews and portfolio management.
If you would like advice on:
• the impact of the proposed ban,
• varying lease terms,
• negotiating a new commercial lease, or
• any other property-related matter,
then please get in touch with our team by using the form here. We provide practical, commercial advice tailored to your business needs.
