Posted Wednesday 22nd July 2026
Upwards-only rent reviews have been a feature of commercial leases for decades. They provide landlords with certainty that rent can increase at review but cannot decrease, even where market rents have fallen.
Recent Government proposals to restrict or prohibit upwards-only rent review provisions have reignited debate across the property sector and raised questions about whether traditional lease structures remain fit for purpose.
Whilst no legislative changes have yet been implemented, the proposals highlight an important shift in thinking about flexibility, occupation and risk allocation within the commercial property market.
What is an upwards-only rent review?
In simple terms, an upwards-only rent review means that rent can increase or remain unchanged at review, but cannot fall below the passing rent.
Historically, these provisions have provided landlords and investors with greater certainty over future income streams and are often reflected in:
For occupiers, however, they can sometimes result in rents remaining above prevailing market levels.
Why is reform being discussed?
The proposals form part of a broader conversation about making commercial property occupation more flexible and better aligned with modern business needs.
Many occupiers are looking for:
Against that backdrop, policymakers have questioned whether traditional upwards-only rent review provisions should continue to be the default position.
What legal points should landlords and tenants review?
Whether reform ultimately happens or not, rent review clauses remain one of the most important provisions in a commercial lease.
Parties should pay close attention to:
The review mechanism
Rent reviews can operate in several different ways, including:
Each mechanism carries different risks and commercial outcomes.
Assumptions and disregards
Rent review clauses often contain detailed assumptions and disregards that can significantly affect the reviewed rent.
These provisions are frequently overlooked during negotiations but can have substantial financial consequences later in the lease term.
Break rights and lease flexibility
Rent reviews should not be considered in isolation.
The interaction between:
can have a significant impact on both landlords and occupiers.
What could future reforms mean?
If restrictions on upwards-only rent reviews are introduced, landlords could face greater exposure to changing market conditions and less certainty around future rental income.
Occupiers, on the other hand, may benefit from rent review mechanisms that more accurately reflect prevailing market values.
Any changes would need to strike a balance between protecting occupiers and maintaining confidence in commercial property as an investment class.
What does this mean for businesses now?
Regardless of whether reform proceeds, businesses entering into new leases should take the opportunity to carefully review rent review provisions and understand how they operate in practice.
Small changes in drafting can have a significant impact on occupational costs over the life of a lease.
Conclusion
Upwards-only rent reviews remain lawful and widely used, but the fact they are being debated at all reflects a broader move towards flexibility within the commercial property market.
For landlords, occupiers and investors alike, understanding how rent review provisions operate – and ensuring they are properly negotiated from the outset – remains critical. As the market evolves, careful drafting and forward planning will be more important than ever.
This article is for reference purposes only. It does not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking or deciding not to take any action.
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