What goes up but never comes down? Commercial rent, for now

On 10 July 2025, the English Devolution and Community Empowerment Bill was introduced to Parliament by Deputy Prime Minister Angela Rayner for its First Reading.

The Bill covers, amongst other things, a ban of upwards-only rent review clauses. Upwards-only rent reviews are typical in commercial leases and provide that rent can only ever stay the same or increase at review dates. To the pleasure of landlords, these clauses need not determine the exact amount that rent could be increased by. To the dismay of tenants, the possibility of downwards rent is conspicuous by its absence. Or so we thought.

What does the Bill propose?

The proposed ban applies to all business tenancies. It makes no difference whether the tenancy has been contracted in or out of the security of tenure provisions of the Landlord and Tenant Act 1954.

Whist the ban would not take effect retrospectively, any lease being renewed post-enactment would be caught by the Bill’s net.

The ban applies where an amount of rent payable under a tenancy could change during the term of that tenancy by an amount that is not known and/or is undetermined. In practice, this prohibits any upwards-only rent reviews that are determined by reference to the open market, are index-linked or are turnover-based. The crux is that the rent must be able to go up or down. Pre-agreed, stepped (i.e. known) uplifts will still be permitted, however.

There are anti-avoidance measures in the proposed Bill; any agreement to circumvent the ban will be void. Moreover, tenants will be able to trigger rent reviews even where the lease only permits the landlord to do this. This is aimed at preventing landlords from delaying reviews when market rents are falling.

What could happen if the Bill is implemented?

The removal of upwards-only rent reviews could significantly affect rental income and property valuations. Faced with greater volatility and uncertainty, landlords are likely to react by offering much shorter lease terms, imposing fixed rent increases, overloading leases with landlord break rights and excluding tenants from security of tenure as standard practice.

Whilst the government no doubt intends for the change to benefit tenants by allowing for downward rent reviews during economic downturns, reducing costs and improving affordability for small businesses, the ban could very well backfire by creating less flexibility and higher rent rates for tenants. The question is palpable: will the ban’s aim really make ‘commercial leasing fairer for tenants, ensure high street rents are set more efficiently, and stimulate economic growth’?

What happens next?

MPs will consider the Bill at its Second Reading which is scheduled to take place on 2 September 2025.

If you would like to discuss the potential impact a ban on upwards-only rent reviews could have on you, please do not hesitate to contact the Commercial Property Team.