Government Proposes Ban on Upwards-Only Rent Review Clauses in Commercial Leases
The UK Government has announced plans to ban upwards-only rent review clauses (UORRs) in new commercial leases. This reform, if introduced, could reshape how both landlords and tenants approach rent reviews and lease negotiations across England and Wales.
At Martinsons Legal, our commercial lease solicitors are following this development closely to help clients prepare for the potential impact on their property interests.
Why Is the Government Proposing a Ban?
The proposed ban is part of wider efforts to revive high streets and support small businesses. Ministers argue that upwards-only rent reviews:
Put disproportionate financial risk on tenants during economic downturns
Prevent rents from reflecting actual market conditions
Contribute to high vacancy rates on commercial properties
By removing upwards-only restrictions, the Government hopes to create a fairer, more flexible framework for both landlords and tenants.
How Will the Ban Work?
If passed into law, the ban will:
Apply to new commercial leases and renewals going forward
Not affect existing leases with UORRs (these will remain valid)
Include anti-avoidance provisions, making clauses designed to sidestep the ban unenforceable.
As a result, landlords may explore alternative lease structures, such as:
Fixed rent increases (stepped rents agreed at the outset)
Shorter lease terms with more frequent reviews
Minimum base rents combined with turnover-based rents
Concerns from Landlords and Tenants
Landlords’ perspective:
Loss of certainty in rental income
Potential impact on property valuations and investor confidence
Risk shifting from tenants to landlords if market rents decline
Tenants’ perspective:
Possible increase in starting rents as landlords look to offset risks
More complex negotiations during lease discussions
Reduced stability from shorter lease terms
What This Means for Businesses
Whether you are a landlord with a large portfolio or a tenant negotiating a first lease, this proposed reform could significantly affect your position. Commercial property law is evolving, and both sides will need to adapt strategies for lease negotiations, rent reviews, and investment planning.
How Martinsons Legal Can Help
At Martinsons Legal, our experienced commercial property solicitors provide expert advice on:
Drafting and negotiating commercial leases
Rent review disputes and strategies
Landlord and tenant rights under the proposed legislation
If you are a landlord concerned about how this ban might impact your rental income, or a tenant seeking fairer lease terms, our team is here to help.
Get in touch today with our english, mandarin and cantonese speaking specialist commercial lease lawyers to discuss how these changes may affect you.