The commercial property sector has reacted furiously to the government’s plan to ban upward only rent reviews as part of the Devolution Bill.
Announcing the bill in Parliament yesterday, the government said upward only rent review clauses in commercial leases “pit landlords against businesses and can make rents unaffordable and cause shops to shut”.
It claimed a ban would “help keep small businesses running, boost local economies and job opportunities and help end the blight of vacant high streets and the unacceptable anti-social behaviour that comes with them”.
Deputy prime minister Angela Rayner said: “We were elected on a promise of change, not just for a few areas cherry-picked by a Whitehall spreadsheet, but for the entire country. It was never going to be easy to deliver the growth our country desperately needed with the inheritance we were dumped with.
“But that’s why we are opting to devolve not dictate and delivering a bill that will rebalance decade old divides and empower communities. We’re ushering in a new dawn of regional power and bringing decision making to a local level so that no single street or household is left behind and every community thrives from our Plan for Change.”
Responding to the news, Melanie Leech CBE, chief executive of the British Property Federation, said: “Interference in long-established commercial leasing arrangements without any prior consultation or warning has no place in the Devolution Bill. It risks investor confidence at a time when development viability is already seriously challenged. Unfortunately, this is another example of a government getting mired in detailed market issues rather than focusing on the big picture of enabling and empowering local public and private stakeholders, including property owners and their customers, to work together to drive economic growth and create thriving town centres.”
Neil Seager, managing partner of Haslams Surveyors: “The news of a potential ban on upward only rent reviews has sent shockwaves through the commercial property sector. The lack of consultation with industry stakeholders is concerning – at best, and at worst, a sign of governmental mismanagement. While the principle of upward only rent reviews aligns with free market dynamics, the real issue lies in the uncertainty this move introduces. The commercial property investment market is fundamentally underpinned by the predictability of upward only rent reviews.
“Disrupting this framework especially at a time when the UK is actively seeking inward investment is both irresponsible and ill timed. Such a policy shift threatens to undermine development viability, stall market activity and trigger a decline in asset values. Investors, faced with increased risk and reduced clarity, may well divert capital away from the sector. I would urge the government to conduct a comprehensive impact assessment and engage in broad based consultation with industry experts. Any legislative changes must be informed by robust data and a clear understanding of all the consequences.”
Paul Leamy, real estate partner at Taylor Wessing, added: “The English Devolution and Community Empowerment Bill, introduced on 10 July 2025, proposes a significant departure from traditional market practice by banning upwards-only rent reviews in new commercial leases and granting tenants a right to trigger rent reviews where the lease does not already provide one. In doing so, it curtails the freedom of landlords and tenants to negotiate the financial terms of rent reviews in a way that has long guided commercial leasing arrangements. The draft legislation has come as a surprise to the real estate industry as there has been little signposting of it being on the horizon prior to publication of the bill.
“While we appreciate the bill’s intent to bring greater balance to rent negotiations, its anti-avoidance provisions, particularly those preventing landlords from reclassifying or supplementing rentals, may have profound repercussions for how commercial leases are structured and financed. These measures would effectively bar any indirect route to recoup shortfalls resulting from a decrease in rent, raising questions about how landlords will satisfy financial covenants in their loan arrangements. The new law won’t apply to leases signed before the rules take effect or to leases based on contracts made before then. Because of this, we expect landlords to rush to finalise new lease agreements before the legislation is in force.”
Steven Turner, partner in professional services at Rapleys, said: “There is a raft of legislation currently underway which affects the property industry. Our main concern with the banning of upward only rent reviews is that the sector and its very experienced stakeholders have not been consulted, which raises questions as to why this is being pushed through so quickly. There may be unintended consequences that haven’t explored fully the impact on commercial property at a time when business rates, NI, MEES, real living wage and other costs are also being factored in.
“The government has made clear it is about growth and development delivery but by not consulting the private sector experts, they risk adding to the pressure many are already under. It takes all stakeholders to make commercial property performance a success and to support growth. We really hope that this is reviewed with a proper consultation put in place as soon as possible.”
