The Ministry for Housing, Communities and Local Government yesterday (10 July 2025) introduced the English Devolution and Community Empowerment Bill to Parliament which seeks to ban Upward Only Rent Reviews (UORR) in commercial leases.

Amongst other things, the Bill seeks to amend the Landlord and Tenant Act 1954 by inserting a new Schedule 7A to prohibit certain terms in rent reviews. In its current form, the Bill provides that if certain conditions are met then any rent review would have no effect to the extent that it would result in the new passing rent being larger than the “reference amount”, which is calculated by reference to the effect of inflation on the rent, the actual rent and hypothetical rent or the amount of the tenant’s turnover.

The Bill states that it would only apply to commercial leases granted after it comes into force. Provisions in existing leases will remain unaffected. It also contains an anti-avoidance provision to prevent parties from excluding the effect of the Bill on a commercial lease.

The Government's justification is that UORR clauses in commercial leases “pit landlords against businesses and can make rents unaffordable and cause shops to shut. This will help keep small businesses running, boost local economies and job opportunities and help end the blight of vacant high streets and the unacceptable anti-social behaviour that comes with them.”

UORR are a staple of England and Wales's commercial property industry. In simple terms, on review in a rising market the rent will increase whereas in a falling one the rent will stay the same. For investors, the certainty that rents will not fall provides income security and underpins the investment market. The risk however falls entirely on the tenant, who can end up after a review paying over the odds for their premises. 

It is this inequity that the Government seeks to address with its surprise announcement, which was made without any prior consultation.  It is unclear, therefore, whether the Government has assessed the impact that a ban would have on the investment market.

The prevalence of UORR has, however, been under attack for some time with 5 year terms (without a rent review provision) commonplace in some sectors, the increased use of turnover rent clauses and RPI or CPI uplifts. The banning of UORR is not an entirely new proposition either. It was banned in Ireland in 2010 and an unsuccessful private member’s bill was forwarded in 2021 under the previous Conservative government to ban future as well as nullify existing UORR clauses. 

The Bill is very much in its infancy, and it will move through the various parliamentary stages with no date currently set for its second reading. It remains to be seen how the Bill will progress and whether the current provisions will remain unscathed from amendment or removal.