Summary
The draft Bill to ban upwards only rent reviews in commercial leases continues its path through Parliament. The Committee stage in the House of Commons has ended and a new version of the English Devolution and Community Empowerment Bill was published on 30 October 2025. The new version addresses tenant concerns in particular.
Status of Bill
On 10 July 2025 draft legislation was introduced in Parliament to ban a mainstay of the market, upwards only rent reviews (“UORR”) in commercial leases. The legislation is Schedule 31 to the English Devolution and Community Empowerment Bill (“the Bill”) and the Bill applies to England and Wales. The changes proposed by the Bill will not apply retrospectively except for a change in relation to existing superior tenancies mentioned in this Law-Now.
Our initial assessment of the potential impacts on UORR of the original version of the Bill was included in Ban on upwards only rent reviews in commercial leases. This summarised those arrangements that we considered would be banned by the Bill and those that should be unaffected.
The Bill has now concluded its Committee stage in the House of Commons and a new version of the Bill was published on 30 October 2025 - see English Devolution and Community Empowerment Bill. The Bill has now begun its Report stage in the Commons.
Changes following Commons Committee stage
At first sight, the revised Bill looks significantly different from the original version, but on closer examination, most of the Bill is the same but re-ordered. The new provisions seek to address a few concerns primarily expressed by tenants but they don’t fully address those concerns, nor do the provisions give much assurance to landlords. Key points include:
- There is a retrospective change for existing (pre-ban) superior tenancies. If the landlord under the superior tenancy can require that a sub-tenancy includes UORR, the Bill modifies the terms of the superior tenancy to permit a rent review that is not upwards only in the sub-tenancy. So, it appears that if a pre-ban superior tenancy has an UORR the tenant remains bound by the UORR, but the landlord under the superior tenancy cannot require an UORR in the sub-tenancy. This doesn’t prevent the landlord and tenant under the sub-tenancy agreeing the rent review terms, but if the sub-tenancy is completed after the ban comes into force, it seems that it couldn’t include an UORR in any event. So, there would remain a rental mismatch between the UORR in the superior tenancy and the non-UORR in the sub-tenancy, which would disadvantage the tenant under the superior tenancy. There will also be a concern for landlords that the draft legislation deprives the landlord under the superior tenancy of any control over the rent review provisions of the sub-tenancy even if they are not upwards only (which seems wider than the legislative purpose).
- A tenant who is not in occupation (but has a right under its tenancy to occupy for business purposes) is treated as a “business tenant” and is therefore protected from UORR. This addresses a tenant concern highlighted by the original Bill - the prospect of a tenant not in occupation under a lease being subject to an UORR, but not being able to include an UORR (due to the ban) in an underlease where the undertenant is in occupation. This change does not apply the ban to pre-ban tenancies, so a tenant under a pre-ban lease with an UORR who post-ban sublets its space cannot include an UORR in the sub-tenancy; again, a mismatch.
- Under the original version of the Bill, for existing tenants, it was proposed that the ban would apply to post-ban put options or agreements for lease with “day-one” UORR designed to circumvent the effect of the ban. This has now been extended to post-ban call options (such as an option to renew) benefiting tenants under existing tenancies, closing a gap in what the Bill covers.
Comment
Nothing in the changes is intended to protect landlords. They primarily address tenant concerns.
While there will be further changes to the Bill as it passes through Parliament, there is no sign as yet that the Government is seeking to address concerns expressed by landlords. The context and key motivation behind the Bill appeared to be vacancies in the high street and especially in retail, but the ban continues to apply to all commercial leases. While the explanatory notes accompanying the Bill hinted that there may be a place for collars in certain circumstances, nothing has yet been included in the Bill.
No timing is set for when the Bill will come into force, but the fact that there is so much other substantial material in the English Devolution and Community Empowerment Bill (unconnected to rent review) is only likely to delay matters. There are likely to be technical consultations on the proposals and indications are that the proposals will not come into force until at least 2027.
