Update: Rent Reviews: No More Up, Up, and Away!

The second reading of the English Devolution and Community Empowerment Bill (the “Bill”) on 2 September 2025 confirmed the Government’s intention to prohibit upwards-only rent reviews in new and renewal commercial leases. For property investors, this marks a potential interference with income stability mechanisms that underpin asset valuation, financing structures, and long-term investment strategy.

Upwards-only clauses have historically ensured rental income remains static or increases, shielding investors from market downturns which happen to coincide with their rent review date. 

Its removal introduces income volatility, complicating cash flow forecasting and potentially weakening covenant strength. Our Q&A article in July 2025 explains the background to the Bill and the possible consequences. One potential unforeseen consequence could be more frequent rent reviews as landlords look to protect themselves from the possibility of reduced rent for as long as period as five years. 

During the second reading, MPs acknowledged the policy’s tenant-friendly intention but offered limited scrutiny of its broader market implications. The lack of consultation with landlords, institutional investors, and industry bodies was a recurring concern, raising questions about unintended consequences. 

Alison Taylor MP cautioned against oversimplifying the issue, warning that reforms aimed at supporting small businesses could have unintended consequences for the wider property sector. Melanie Leech CBE, Chief Executive of the British Property Federation, echoed these concerns, noting that the announcement, made without warning, has unsettled investor confidence and damaged perceptions of UK policy stability. She emphasised that the measure is unlikely to impact short-term retail leases but will affect offices, logistics, and other long-duration assets.

The Bill passed its second reading with a clear majority, but the absence of detailed analysis emphasises the need for investor vigilance. In addition to this passing, the late announcement of the Autumn Budget, scheduled for 26 November, adds further uncertainty to year-end planning.

While the Bill has gained legislative momentum, key investor concerns remain unresolved. The Public Bill Committee is expected to report to the House by 12 November, so stakeholders should actively engage in the committee stage to ensure the final legislation reflects the operational and financial realities of commercial real estate. If enacted, the ban would constitute one of the most significant changes to UK property law in recent years.