On 10 July 2025, the government introduced the English Devolution and Community Empowerment Bill to the House of Commons.
While the Bill’s 329 pages mainly focus on devolution, there was a surprise for the property world: Clause 71 and Schedule 31 propose a ban on upwards-only rent review clauses in business leases.
Angela Rayner had been a strong political backer of the proposal. With her recent departure, however, there are now real question marks around whether the ban will progress in its current form.
In this article, I’ll explore what’s in the Bill, how it could reshape lease negotiations, and what landlords, tenants, and investors should start thinking about now.
WHAT ARE UPWARDS-ONLY RENT REVIEWS?
Upwards-only rent review clauses are a long-established feature of UK commercial leases. They mean rents can be reviewed periodically, commonly every five years but never go down, only stay the same or increase.
- For landlords: They provide income security and help protect property values.
- For tenants: They’re often criticised as one-sided, locking occupiers into higher-than-market rents even if the economy softens.
It’s worth noting that while tenants have raised concerns about affordability and being priced out, it’s not necessarily the case that banning these clauses has been a long-standing tenant demand. Some fear landlords may simply set higher fixed rents to compensate for the added risk.
THE SCOPE OF THE PROPOSED BAN
The Bill sets out a broad framework for how the ban would work:
Condition A: Scope
- Applies to business leases under the Landlord and Tenant Act 1954, including contracted-out leases.
- Covers a wide definition of “business” activity.
- Does not apply to intermediate landlords who aren’t in occupation, creating potential issues where sublease rents drop but headleases stay fixed.
Condition B: Timing
- The ban won’t be retrospective.
- It applies only to new leases once the law is in force.
- Existing leases and agreements signed before commencement are unaffected.
- Expected to apply to renewals and to implied surrenders and regrants.
- Landlords may accelerate deals before 2027 to lock in upwards-only clauses while still possible.
Condition C: Rent Review Provisions
- Covers leases where rent may vary during the term but isn’t fixed at the outset.
- Excludes fixed uplifts and stepped rents (which may become more common).
Condition D: Type of Review
Covers reviews linked to:
- Inflation indices (CPI, RPI, etc.)
- Market rent valuations
- Turnover-based or notional rent models
If the review results in a lower figure than the passing rent, the tenant pays the lower figure, a major departure from traditional practice.
WHAT ABOUT RENT COLLARS AND MINIMUM RENT CLAUSES?
The government has signalled that rent collars, minimum rent provisions designed to stop rents falling – will be ineffective under the new law.
Possible exceptions could include:
- Flat minimum levels (e.g., 10%, 15%, or 20% of rent).
- Collars allowed only if paired with a cap.
This suggests a desire to stop landlords sidestepping the ban while still leaving room for balanced lease structures.
A MORE TENANT-FRIENDLY PROCESS
The Bill also gives tenants more leverage in rent reviews:
- Tenants can trigger a review with written notice during the review window.
- If landlords delay, tenants can serve a 7-day notice to force progress.
Traditionally, time isn’t “of the essence” in rent reviews. These changes could add pressure on landlords to move things along.
WHEN WILL IT HAPPEN?
The government’s own assessment suggests 2027 or 2028, but there’s no confirmed date.
That leaves the property market in a holding pattern. With Angela Rayner’s exit, the policy could be delayed, softened, or even dropped depending on how Cabinet priorities evolve. If so, the market could face a patchwork of old and new lease structures, adding complexity for lawyers, investors, and businesses alike.
POLITICAL BACKDROP: WHAT RAYNER’S DEPARTURE MEANS
Angela Rayner was a vocal advocate of the ban. Without her, the policy’s future is less clear.
- A reshuffle could mean the proposal is watered down or dropped entirely.
- If it survives, it would be one of the most significant tenant-leaning reforms in decades.
- Already, landlords are looking for ways to lock in leases before the rules change.
This shifting political landscape adds another layer of risk and unpredictability for all sides.
MARKET IMPLICATIONS
For landlords
- May pivot to stepped rents or fixed uplifts.
- Could push for higher initial rents.
- Must manage lease chains carefully where intermediate landlords are involved.
For tenants
- Likely to welcome added flexibility.
- But could see higher starting rents as landlords rebalance risk.
- Need to negotiate carefully to avoid unintended costs.
For investors and lenders
- Income streams and valuations could be significantly affected.
- Long leases with rent review provisions may face particular scrutiny.
- Expect more caution until the final shape of the law is confirmed.
HOW TO PREPARE NOW
With change on the horizon, practical steps include:
- Landlords – review portfolios and consider bringing forward lease grants.
- Tenants – prepare negotiation strategies to take advantage of potential reforms.
- Investors and lenders – stress-test valuations against different rent review outcomes.
- Legal advisors – prepare for demand in reshaping leases under the new framework.
A PERIOD OF ADJUSTMENT AHEAD
If enacted, the ban would represent a fundamental shift in UK leasing. The short-term benefit may sit with tenants, but landlords will adapt quickly, likely by front-loading risk into fixed or stepped rents.
The transition will need careful legal, financial, and commercial planning. With the political outlook still fluid, it’s a case of “watch this space.”
NEED SUPPORT?
Got questions or want tailored advice? Whether you’re a landlord, tenant, or investor, our Property & Real Estate and CP Business Law team can guide you through these changes with clarity and confidence.
