This is a plain-English, practical guide where we will provide a snapshot of what’s changing, why it matters and how you can prepare. We’ll give you the context, highlight the practical implications, and help you plan your next steps as the law evolves. This is intended be part 1 of a series of articles on this subject matter, to be circulated as the issue evolves and the Bill potentially becomes good law.
What’s on the table and why does the government care?
The headline proposal is a statutory ban on upward-only rent reviews for new commercial leases in England, with the details and timing to be confirmed through the English Devolution and Community Empowerment Bill (Devolution Bill). The government’s stated aims are to support high street resilience, rebalance bargaining power between landlords and tenants and drive regional growth.
Stakeholders (key landlord / landowner / investor think-tank) have been quick to weigh in, pointing at not being consulted. A recent supplication by the stakeholders for judicial review has been refused. Occupiers generally welcome the prospect of greater flexibility and downside protection. Landlords and lenders, on the other hand, warn that the change could impact property valuations, debt covenants and investment appetite. Specialists expect a shift towards indexation, caps and collars and turnover-based rent reviews. There’s also a precedent from Ireland, where a 2010 ban nudged deals towards indexation and turnover rents, though downward resets were often limited by the use of floors or benchmarks in drafting. Part 2 in this series will look to explore how successful this approach has been in Ireland and what the property industry in England and Wales can learn from this.
How will deals change?
Expect to see more index-linked reviews (such as CPI) with collars and floors and annual compounding. Fixed uplifts or stepped rents may be used to lock in growth, while turnover rents could come with higher base rent floors. Landlords may also reprice incentives, offering fewer rent-free months or fit-out contributions and look to rebalance risk elsewhere. Think tighter user or alienation clauses, stricter repair obligations and broader service charge scopes. Shorter lease terms or more frequent reviews could also become the norm to manage uncertainty and protect valuations.
For occupiers, the counterplay will be to push for upward and downward open-market reviews, or pure indexation with sensible caps and minimal (if any) collars. If collars or floors are unavoidable, occupiers should negotiate for lower base rents or enhanced incentives. Turnover rents can be attractive if they come with a lower base, transparent audit rights and break options. It will be important to guard against disguised floors such as minimum rent assumptions.
How can you stay ready?
The Bill is not yet law and will not apply retrospectively, so there’s little immediate action to take. However, now is the time to plan your strategy for when the law comes into effect. Consider whether you can delay renewals or new leases to benefit from the new regime. Develop a rent review mechanics playbook for future negotiations, including your preferred review structures and fallback positions. Monitor legislative progress and be ready to update heads of terms, AFLs, and renewal strategies once the law is in force. Brief your internal teams and advisors so you can move quickly when the changes take effect.
Leasehold reforms and the bigger picture
With the introduction and implementation of The Leasehold and Freehold Reform Act 2024, we are starting to see more clearly the Parliament’s direction of travel. There is a renewed political focus on commonhold, with increased leaseholder protections by increased transparency between landlord and tenants and rising professional standards amongst managing agents. We’re likely to learn more once details around the ban on upwards-only rent reviews see the light of day.