Nearly two-thirds of UK businesses that signed commercial leases in the past five years are locked into rent review clauses that can only push their rent up, never down. That means if the market around them drops, their rent stays stuck at the high point. I’ve watched this pattern repeat across dozens of lease negotiations, and it’s one of the most quietly damaging traps a business can walk into. The good news is that the rules are about to change in a big way, but only if you know what to look for and what to avoid right now.
These aren’t distant hypotheticals. The commercial property rental checklist most businesses rely on hasn’t caught up with what’s coming. If you’re signing a lease today or planning to renew one in the next twelve months, the decisions you make now could lock you into terms that the law itself is about to abandon. Here’s what you actually need to know.
What an upward-only rent review actually means for your bottom line
An upward-only rent review is exactly what it sounds like. Every few years, your lease allows the landlord to reassess the rent. If market rents have gone up, yours goes up. If they’ve stayed flat, yours stays flat. If they’ve dropped, yours still stays flat. You never get a reduction. Over the past decade, I’ve seen small businesses paying 20 to 30 percent above the going rate for their area simply because they signed a lease during a peak and the market never came back up to meet them.
The Government’s rationale is straightforward. These clauses were identified as a barrier to small business survival and a contributor to high street vacancy rates. When a tenant is trapped in above-market rent, they can’t invest in their business, they can’t expand, and eventually they close. The proposed ban, expected to receive Royal Assent later in 2026, would apply to all new leases and lease renewals, with robust anti-avoidance provisions to stop landlords from sneaking in workarounds. If I were advising a client today, I’d tell them to push for a rent review clause that mirrors what the law is about to require — even if the lease is signed before the ban takes effect.
Where businesses get tripped up — and how to avoid it
Most of the mistakes I see aren’t about signing a bad lease. They’re about not reading the lease with the right questions in mind. Here are the three most common traps, and what to do about each one.
Ignoring the rent review mechanism until it’s too late
Businesses focus on the headline rent and the deposit. They don’t look at how the rent can change over time. Under the current system, an upward-only review can add thousands to your annual costs without any improvement in the property itself. The proposed ban changes this, but only for leases signed after it becomes law. If you’re renewing an existing lease, the old rules still apply. My advice is to negotiate a rent review clause that allows for downward movement now, even if the landlord pushes back. Use the upcoming legislation as leverage — it’s harder for a landlord to argue that upward-only is standard practice when the Government is about to outlaw it.
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| Lease type | Current rule | Post-2026 rule (proposed) |
|---|---|---|
| New lease | Upward-only allowed | Upward-only banned |
| Statutory renewal | Upward-only allowed | Upward-only banned |
| Contractual renewal (original lease dated before 17 March 2026) | Upward-only allowed | Upward-only allowed (unless amendment changes this) |
| Contractual renewal (original lease dated on or after 17 March 2026) | Upward-only allowed | Upward-only banned under proposed amendment |
Overlooking the EPC clock
Energy Performance Certificates currently last ten years. Under the expected reforms in the second half of 2026, that lifespan will shorten, and landlords will be required to maintain a valid EPC throughout the entire tenancy — not just at the start. If the property’s EPC expires mid-lease and the landlord doesn’t renew it, you could be in breach of Minimum Energy Efficiency Standards. That means penalties and potential restrictions on your ability to sublet. Before you sign, check the EPC issue date. If it’s more than five years old, you’re likely facing a recertification during your lease term. Factor that into your negotiations. A heritage lease may have even more complex EPC implications, as listed buildings could be brought into the regime for the first time.
Misjudging the business rates revaluation
From 1 April 2026, rateable values in England will be updated based on rental values as of 1 April 2024. That’s a two-year lag, but it still matters. Properties in areas where rents rose between 2022 and 2024 could see their rateable values jump. The new five-tier multiplier structure means properties with a rateable value below £500,000 — most small shops, cafes, and offices — will benefit from a lower multiplier. But if your property crosses that threshold, you’ll face a higher “high-value” multiplier. I’ve seen businesses caught off guard by a rateable value reassessment that added thousands to their annual overheads. Check the current rateable value on the government’s valuation office website before you sign. If it’s close to £500,000, understand exactly where you’ll land under the new structure.
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How to protect your business before the law catches up
The legislative changes are coming, but they’re not here yet. That leaves a window where you can act proactively. Here’s what I’d do if I were negotiating a commercial lease today.
Rewrite the rent review clause yourself
Don’t wait for the ban. When you’re negotiating heads of terms, ask for a rent review clause that explicitly allows for downward movement. The landlord may resist, but you have two strong arguments. First, the market is moving in this direction anyway — the ban is coming. Second, a downward-only or open-market review actually makes the lease more attractive to future buyers or assignees, because it removes the risk of above-market rent. If the landlord insists on upward-only, ask for a shorter review period — say every two years instead of every five — so you’re not stuck with a bad rate for as long. If you need professional help drafting the clause, a real estate lawyer can review the language and flag any anti-avoidance risks.
Build an EPC contingency into your lease
Since the rules are changing, you need a contractual safeguard. Add a clause requiring the landlord to maintain a valid EPC for the entire lease term and to cover the cost of recertification. If the property fails to meet Minimum Energy Efficiency Standards during your tenancy, the landlord should be responsible for the necessary upgrades. This isn’t standard yet, but it will be soon. Getting it in writing now saves you from a dispute later. A clear understanding of notice periods is equally important — if you need to exit a lease because the property becomes non-compliant, you need to know how much time you have.
Plan for the inheritance tax relief cap if you own the property
If you own your commercial premises through a company or partnership, the changes to Business Property Relief and Agricultural Property Relief matter to you. From 6 April 2026, BPR and APR combine into a single £1 million allowance at 100% relief. Any qualifying value above that threshold receives only 50% relief, creating an effective 20% inheritance tax charge on the excess. For a business premises worth £2 million, that means a potential IHT bill of £200,000 on the excess. If you’re planning succession or restructuring, this changes the numbers significantly. A financial advisor can help you model the impact and explore options like holding the property in a trust or restructuring ownership before the April deadline.
Prepare for the new business rates landscape
The revaluation on 1 April 2026 is based on rental values from April 2024. If your property’s rental value has changed significantly since then, your rateable value may not reflect current reality. You can challenge it through the Check, Challenge, Appeal process. Start gathering evidence now — comparable rental evidence from 2024, photographs, and any vacancy or condition issues that might support a lower valuation. The transitional relief will phase in large increases, but it won’t eliminate them. If you’re in a property with a rateable value near £500,000, consider whether downsizing or relocating to a smaller space could keep you below the threshold. A smaller commercial space might not just save on rent — it could save on rates too.
Can a landlord still include an upward-only rent review if the lease is signed before the ban? ▾
What happens if my current lease has an upward-only review and the market drops? ▾
Do the EPC changes apply to listed buildings? ▾
How do I check my property’s rateable value before the 2026 revaluation? ▾
Can I challenge a business rates valuation before the revaluation takes effect? ▾
The commercial property landscape in the UK is shifting faster than most lease templates can keep up with. The end of upward-only rent reviews, tighter EPC rules, a restructured business rates system, and a cap on inheritance tax relief all point in the same direction: the old way of signing a lease without reading the fine print is no longer viable. My advice is to treat every lease negotiation as if the 2026 reforms are already in effect. Push for downward rent reviews, lock in EPC maintenance obligations, check your rateable value, and plan for the IHT cap if you own the property. The businesses that do this now will be the ones that aren’t caught off guard when the law catches up. If this was useful, you might also want to read The Secret Landlord Trap: How to Really Negotiate Commercial Rent in the UK.
Sources and Further Reading
Essential Tips for Renting a Roadside Retail Space in the UK — Practical guidance for businesses considering high-visibility roadside locations, including lease negotiation tactics and location-specific risks.
Upwards-Only Rent Reviews: What the 2026 Reforms Mean for Commercial Leasing. Redkite Solicitors, 2026.
A Practical Guide to Upcoming Commercial Property Law Changes in 2026. Longmores Solicitors, 2026.
Commercial Property Law Changes Coming in 2026. SO Legal, 2026.
