PropList Blog
Understanding Upward-Only Rent Reviews, the 2025 Shake-Up, and What It Means for Tenants & Landlords

For decades, upward-only rent reviews (UORRs) have been a cornerstone of the UK commercial property market, safeguarding landlord income but often squeezing tenants during downturns. With the government now proposing a ban, this entrenched practice is set for its biggest shake-up in generations, potentially reshaping how landlords, tenants, and investors negotiate leases.

What Are Upward-Only Rent Reviews?

In commercial leasing across England and Wales, upward-only rent reviews (also known as UORRs) are longstanding lease provisions. Basically, they mean that at a rent review (typically every three to five years), the rent can only stay the same or increase, even if market rents have fallen. It acts as a one-way safeguard for landlords, with the flipside being that it often burdens tenants, especially during economic downturns, by locking them into above-market rents.

This model has provided landlords, institutional investors, and lenders with income certainty and helped underpin property values, particularly in sectors relying on stable rental streams. However, tenants, especially small businesses, frequently raise concerns that these clauses are unfair and can threaten business viability by preventing rents from falling when markets soften.

What’s Changing in 2025: The Proposed Upward-Only Rent Review Ban

In July 2025, the UK Government introduced the English Devolution and Community Empowerment Bill, which includes a controversial proposal: a ban on upward-only rent reviews in new or renewed commercial leases in England and Wales.

Key Features of the Proposal

• Scope: Applies only to new leases and renewals (including statutory renewals under the 1954 Landlord and Tenant Act); existing leases remain unaffected until renewal or re-letting.
• Mechanisms targeted: Any rent review clause that allows only increases where the future rent isn’t predetermined (such as open-market, index-linked (without collar), or turnover-based formulas) will be unenforceable.
• Permitted alternatives: Fixed or stepped rents (pre-agreed increases specified at the lease’s outset) and two-way reviews (allowing both increases and decreases) are exempted.
• Anti-avoidance measures: The bill prevents contractual workarounds – side agreements or shifting terms to avoid the ban. It empowers tenants to trigger reviews if landlords delay, and opting out is not permitted.
• Timeline: The bill’s impact assessment suggests implementation could start in 2027/28, though final timing depends on the parliamentary process.

Additional Legal and Academic Perspectives

• Clyde & Co notes the surprise factor of this policy shift and cautions about its broad application across all commercial property types, urging stakeholders to assess unintended consequences
• Pinsent Masons highlights that the ban is rooted in government concerns that UORRs “lead to artificially high rents during economic downturns”, affecting tenants’ profits and consumer prices. It underscores the goal to “stimulate economic growth” by making rent-setting more efficient
• A Financial Times letter from chartered surveyor Tony Parrack (with over 40 years of experience) argues the proposal is out of step with current practice. He recalls a failed attempt to ban upwards-only rent reviews around 15 years ago, with an offer of both up and down reviews – tenants declined, trusting the market instead. Today’s typical short-term, break-option leases often avoid rent review altogether

What the Rent Review Provisions Mean for Tenants

For tenants, the proposed ban on upwards-only rent reviews offers both opportunities and challenges.

On the positive side, the change introduces greater flexibility and fairness. Rents will be able to reflect actual market conditions, rather than being locked into perpetual increases, which could provide much-needed relief during downturns. This policy has been welcomed by many retail and high street tenants in particular, as it may help ease the financial pressures that have weighed heavily on the sector.

That said, tenants should also be mindful of potential trade-offs. Landlords, keen to offset the risk of declining rental income, may start building in higher starting rents or use stepped increases. This could, paradoxically, leave some occupiers in an “over-rented” position despite the policy’s intent. 

Ultimately, for SMEs, startups, and retailers, the proposed ban represents a chance to build long-term resilience. By negotiating leases that reflect genuine market movements, these businesses can better manage overheads, reinvest in growth, and avoid being locked into unsustainable rents. In an era where flexibility is critical for survival, tenants who move decisively could secure favourable terms that support both stability and scalability.

What It Means for Landlords & Investors

For landlords and investors, the picture is more complex.

The main concern is the loss of income certainty. UORRs have long underpinned property valuations and provided assurance for lenders. Their removal introduces new layers of risk into rental streams, which in turn could influence how assets are priced and financed. 

Commercial property industry leaders, such as British Land’s CEO, have voiced fears that the reform could dampen investor confidence and complicate town centre regeneration strategies.

Legal and market commentators also caution that the shift may lead to distortions in rent structures, with landlords turning to alternatives such as stepped rents, fixed uplifts, or caps and collars. This may reshape the leasing landscape more significantly than the government currently anticipates.

Even so, the property market has shown its ability to adapt. Ireland’s experience, having abolished UORRs in 2010, demonstrates that alternative rent models can be absorbed over time. And some analysts argue that the reform simply reflects existing market realities, with shorter leases and flexible break clauses already becoming the norm. In this light, the legislative ban could be seen as catching up with trends that are already reshaping the sector.

Final Thoughts and Next Steps

The government’s proposed changes to the rent review process in new commercial leases represent a significant recalibration of risk allocation between landlords and tenants. While it aims to enhance fairness, especially for SMEs, it also introduces legal, valuation, and market-level uncertainties.

Here are our recommendations for PropList readers:

• Tenants: Now’s the moment to negotiate aggressively for transparent, fair rent mechanisms.
• Landlords & Investors: Reassess lease structures and valuation models – consider fixed or stepped reviews, and be aware of how secondary regulations (e.g., caps/collars) may evolve.
• All practitioners: Keep a close eye on the bill’s progress – especially amendments ahead of the second reading in September 2025 and the potential implementation timeline of 2027/28.

Market reforms are changing the rules – but they also create opportunities. At PropList, we help landlords, tenants, and investors navigate the shifting property landscape with clear, accessible listings and expert insights. Whether you’re looking to lease, list, or invest, PropList can connect you with the right opportunities in a market on the move. 

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