The UK government has proposed a ban on upward-only rent review clauses in new commercial leases across England and Wales, aiming to make rents more responsive to market conditions. The reform, part of the English Devolution and Community Empowerment Bill, would prohibit lease terms that prevent rent reductions during review or renewal.
While existing contracts remain unaffected, all new leases must adopt either fixed rents or review mechanisms that allow for both increases and decreases. The move is designed to ease cost pressures on small businesses, reduce vacant high street properties, and promote local economic revitalisation.
Craig Beaumont, Executive Director at the Federation of Small Businesses, welcomed the move:
“A typical small firm has faced rising rents and rates among all the other costs like national insurance contributions, so this change should bring some relief.”
However, the property industry has raised concerns over the lack of consultation and potential unintended consequences.
Melanie Leech, Chief Executive of the British Property Federation, stated:“Interference in long-established commercial leasing arrangements without any prior consultation or warning has no place in the Devolution Bill.”
The reform builds on last year’s high street rental auction powers, reinforcing the government’s broader strategy to lower entry barriers for smaller occupiers. If passed, the ban could reshape lease negotiations, asset valuations, and investment models across the UK’s retail and office sectors.
