Back in July 2025, the English Devolution and Community Empowerment Bill (Bill) caused quite a stir when it proposed banning Upwards-Only Rent Review (UORR) clauses in commercial leases, something we unpacked in our earlier article, "Surprise surprise: Proposed ban on upward‑only rent review shakes commercial property industry". 

Fast forward a few months, and the Bill is still making its way through Parliament, but not without refinements following the Commons Committee stage. This piece revisits the story, highlights what has changed, and explores what these developments mean for landlords, tenants, and the wider property market. Spoiler alert, if you are a fan of UORR, brace yourself, this is not a comeback tour.

What is UORR and why does it matter?

An UORR clause guarantees that rent can only go up (or stay the same) at review, but never decrease, even if market conditions deteriorate. For landlords, this has been the golden ticket - predictable income and strong valuations. For tenants? Less so. In downturns, these clauses can feel like being stuck in a lift that only goes up.

Historically, UORR clauses have been a standard feature of UK commercial leases, underpinning valuations and lending assumptions. The government’s intervention aims to create a fairer, more flexible leasing environment, particularly for small businesses and high streets struggling with vacancies. In short, more breathing room for tenants, less guaranteed income protection for landlords.

Recent changes: What has been amended?

While the headline remains unchanged (i.e. UORR clauses are prohibited), the detail has evolved. The most notable developments include:

Superior tenancies and subleases 

The Bill now retrospectively overrides any superior lease term requiring UORRs in subleases, so the sublease can adopt a rent review that is not upwards-only. In practice, this means that while the superior lease remains bound by its UORR, the landlord cannot insist on replicating that clause in a new sublease granted after the ban takes effect. This creates a potential mismatch, the superior lease may still prevent any reduction in the rent, while the sublease could allow downward adjustments. An outcome that could disadvantage the tenant under the superior lease and reduces the landlord’s control over sublease terms.

Definition of “business tenant”

The Bill now clarifies that a tenant who is not in occupation but has a contractual right to occupy for business purposes is treated as a “business tenant” and therefore benefits from the ban. This applies to any lease that could fall under Part II of the Landlord and Tenant Act 1954, even if the tenant has not yet taken occupation but holds a contractual right to do so for business purposes. This change addresses a gap in the original draft, which risked leaving such tenants exposed to UORR clauses while preventing them from including similar terms in any underlease. However, this amendment does not apply retrospectively. Tenants under pre-ban leases with UORR clauses remain bound by them, even if they sublet after the ban comes into force.

Closing loopholes on options

The original Bill sought to prevent landlords from using post-ban put options or agreements for lease with “day-one” UORR clauses to circumvent the ban. Following Committee Stage, this safeguard has been extended to cover call options (such as renewal rights) benefiting tenants under existing leases. This closes an important gap and ensures that both put and call options cannot be used to reintroduce UORR clauses after the ban takes effect.

Policy motivation: Why the focus on tenants?

The government’s approach remains firmly tenant-centric. None of the recent changes offer additional protections for landlords. Instead, the amendments continue to prioritise tenant flexibility and affordability. This is unsurprising given the Bill’s broader context, addressing high street vacancies and supporting retail resilience.

While the explanatory notes hinted that collars (minimum and maximum limits on rent changes) might be permitted in certain cases, no such provisions have been included in the current draft. This omission reinforces the government’s stance that rent reviews should reflect market realities without artificial upward bias.

Practical implications 

The practical implications of the ban are significant for all parties involved. For landlords, the removal of UORR clauses introduces downside risk, which could affect property valuations and lending assumptions. Lease templates will need a complete overhaul to remove UORR provisions and incorporate alternative mechanisms, and the added uncertainty may lead to more cautious investment strategies, particularly for long-term projects. 

Tenants, on the other hand, stand to gain greater flexibility, as rents can now move both ways, a welcome change in softer markets. However, this benefit may come with trade-offs, as landlords are likely to seek higher initial rents or other concessions to offset risk. 

For the wider market, the shift will be equally transformative, CPI or RPI-linked reviews and stepped rent structures are expected to become much more common. Legal teams will need to adapt quickly to these changes, ensuring compliance while balancing commercial objectives in a landscape where traditional UORR clauses are no longer an option.

Challenges and unanswered questions

Several challenges and unanswered questions remain around the ban. For instance, what exactly qualifies as a “new lease”? What variations or extensions will be caught by the prohibition? There is also uncertainty over how hybrid or turnover-based rent review models will be treated under the new regime. Enforcement is another grey area, who will be responsible for monitoring compliance, and what remedies will be available if a landlord includes a prohibited UORR clause? These issues are expected to be clarified through technical consultations and secondary legislation, but for now, they represent real risks that parties need to keep in mind.

Key takeaways

The ban on Upwards-Only Rent Reviews marks a significant shift in UK leasing practice. While the government’s focus on tenant protection is clear, the changes raise complex questions for landlords, investors, and advisers. No implementation date has been set. Given the breadth of unrelated provisions within the English Devolution and Community Empowerment Bill, commencement is likely to be delayed. Technical consultations are expected, and current indications suggest the ban will not take effect before 2027. 

Parties should begin revising documentation, exploring alternative rent review structures, and preparing for a market where flexibility, rather than certainty, becomes the norm.