It has been widely reported that the Government introduced draft legislation to ‘ban’ upward only rent review (UORR) in commercial leases into the English Devolution and Community Empowerment Bill (the Bill), published on 10 July 2025. An amended draft of the of the Bill was published on 30 October 2025 which is currently with the House of Lords at Committee stage.
As yet there is no indication for when the Bill will receive Royal Assent but industry speculation suggests that this will be in 2027.
As drafted, the ban is not intended to catch leases that are in place before the legislation comes into force but landlords, tenants and their advisers should be considering how the introduction of the ban will affect the grant of commercial leases as well as wider asset and investment management matters going forward.
What is Proposed
The Bill is still making its way through Parliament but at this stage we do know that the changes will be enacted by inserting new provisions into the ‘54 Act. The changes will introduce a ban on landlords including upward only rent review in any new lettings as well as in renewals leases, including leases being renewed under the ’54 Act.
The new changes will give powers to tenants to enact rent reviews where leases are restrictive or silent to prevent a landlord from avoiding a rent review if there is a market downturn.
Considerations for landlords and tenants
On face value, the news is bad for landlords and good for tenants, but we of course do not know how the industry reacts to the changes.
Landlords should start implementing strategic reviews with their surveyors and legal advisors to consider what effect the ban on UORR will have on income and investment values and how best to mitigate these effects. Landlords should actively engage with their asset managers, legal and other advisors to identify which leases will end after the ban comes into force on what steps can, or should, be taken to renew, regear or extend leases prior to the ban coming into force. Landlords should be taking advice on how the ban will affect valuations.
Tenants should be aware that there are likely to be changes in terms offered by landlords, with many predicting shorter leases, stepped rents and landlord only break provisions becoming more common.
Tenants already in occupation wanting the security of a longer term may want to engage with landlords sooner rather than later to negotiate extensions or reversionary leases on more favourable terms in return for agreeing an UORR.
Considerations for Charities
Charity landlords will still need to comply with the provisions of the Charities Act 2011 and their own governing documents in relation to any lettings. The uncertainty surrounding how the market will react to the proposed changes will make obtaining expert external advice from their surveyors and legal team even more important.
Charities who are renting functional property such as schools, clinics or community centres may want to engage with their advisors on the potential ramifications of the proposed legislation.
Conclusion
As the Bill is still in draft form, we are unable provide definitive advice, but we will continue to monitor the progress of the Bill through Parliament.
However, both landlords and tenants should start taking steps to review the terms of their existing lettings and obtaining advice on how to mitigate or take advantage of the proposed changes.
For further information and advice please contact Nishita Gudka (Nishita.Gudka@lbmw.com) or your usual contact at LBMW LLP.