From 2027/28, a ban on upwards only rent reviews is expected to be enforced.

An upwards only rent dictates that during a scheduled rent review, the rent can either increase (if the market value of the property has gone up) or stay the same (if market rents have fallen or stayed flat). In short, rent can go up but it can never go down.

Since the 1970s, upwards only rent reviews have been one of the defining features of commercial leases in the UK. They have provided landlords with security of income and confidence in the long-term performance of their asset for the full lifetime of their agreed leases. However, with growing political scrutiny and increasing calls for reform, this longstanding position is now set to change.

What leases are affected?

The government is planning a ban that applies to almost all business leases (even contracted-out ones), as long as the tenant is actually running a business from the space when rent is reviewed.

• No sneaky workarounds: Landlords can’t bypass the rule using side letters or hidden agreements. The law will simply ignore them.
• When it happens: It won’t kick in until around 2027 or 2028 (though no exact date is set yet).
• Catching existing leases: While it mainly applies to new leases signed after the law passes, there is a catch: it will also apply retrospectively to any lease renewals made after March 17, 2026 (though the exact definition of a “renewal” is still pretty vague).

Will the Ban Backfire?

While the proposed ban on upward-only rent reviews aims to promote fairness and align long-term leases with true market forces, it raises critical questions about the future of commercial property investment. Far from guaranteed success, the legislation could trigger several unintended market adaptations:

• Shift to Shorter Leases: Landlords may favour short, contracted-out leases to maintain leverage and protect income during renewal negotiations.
• Higher Starting Rents: Premium pricing on initial rents could become common practice to compensate landlords for future risk.
• Alternative Rent Structures: To circumvent standard market reviews, landlords might pivot toward index-linked reviews (which historically rarely decrease) or fixed stepped increases.

Ultimately, whether the ban will build economic resilience or simply push the market toward workarounds depends heavily on the upcoming government consultation and the clarity of the final legislation.

The Importance of Early Advice

Whether you are a landlord or an occupier, securing specialist advice well ahead of key lease events is essential. You shouldn’t wait for the new legislation to take effect before reviewing your strategy.
If you’d like to explore how the ban on upward-only rent reviews might impact your commercial property portfolio, please feel free to reach out.