Cluttons’ lease advisory team give their view on the proposed ban on upwards-only rent reviews

The Government has proposed a ban on upwards-only rent reviews in new leases adding to the uncertainty facing the UK’s commercial real estate market. The industry has been critical of the proposal, and there is a risk that the move will weigh on investor sentiment.

Upwards-only rent reviews are a key factor in why business leases are attractive to investors and lenders, with a stable guaranteed cash flow over the lifetime of a lease.

Abolishing this long-established, upwards-only rent review could undermine the business lease as a secure investment and lending model and impact how commercial property is valued.

But the reality is more nuanced. The days of the institutional 25-year lease with five yearly upwards-only rent reviews are long gone. Many leases, especially of more secondary assets are let for three or five years or ten years with a five-year break. The average lease length including breaks across All Property Types is now less than 7 years.

The ban is likely to affect longer leases on trophy assets, but upwards-only rent reviews to market rental value could be replaced by indexation.

However, higher inflation rates seen in recent years cast a different light on this proposal.

Clutton’s Lease Advisory Team says:

“Abolishing upwards-only rent reviews will be of benefit for some tenants and will certainly make open market rent reviews more interesting to negotiate. Making a blanket change across all sectors to well established commercial terms will likely cause wider knock-on effects in the market.

We have seen increased reliance on index-linked reviews, particularly in the industrial and logistics sector and whilst it won’t be valid to include an upwards-only mechanism, in reality it is uncommon for the RPI or CPI to decrease over a long period of time. Therefore, we would anticipate landlords exploring fixed uplifts or index-linked reviews during lease terms.

Shorter leases, outside the act, may also become more common.

This unexpected proposal and lack of consultation has shocked the market and we would welcome the Government to share the data and information they used to build a case for this move. A blunt implement such as this change may not be the best way to support tenants.”

© Cluttons LLP. 2025. This publication is the sole property of Cluttons LLP and must not be copied, reproduced, or transmitted in any form or by any means, either in whole or in part, without the prior written consent of Cluttons LLP. The information contained in this publication has been obtained from sources generally regarded to be reliable. However, no representation is made, or warranty given, in respect of the accuracy of this information. We would like to be informed of any inaccuracies so that we may correct them. Cluttons LLP does not accept any liability in negligence or otherwise for any loss or damage suffered by any party resulting from reliance on this publication. We strongly recommend that you always seek advice and presentation from a suitable qualified professional on any matter.