Over the past year, I’ve watched the commercial property landscape in the UK shift in ways I haven’t seen in two decades. The government’s surprise proposal to ban upwards-only rent reviews, published in July 2025 without prior industry consultation, caught even seasoned property lawyers off guard. That single change, if enacted, would fundamentally alter the financial logic of every new commercial lease in England. It’s the kind of development that makes you realise how much of what we assume about renting commercial space is built on rules that could change faster than most tenants expect.
What these figures tell you is that the ground is shifting under your feet. If you’re looking to rent commercial space in 2026, you’re entering a market where the old certainties — like knowing your rent can only go up, or that service charges are loosely managed — are being replaced by something more tenant-friendly, but also more complex. Here’s what you actually need to know.
What the proposed ban on upwards-only rent reviews means for you
Let’s start with the biggest change on the horizon. An upwards-only rent review clause means that when your rent is reviewed — typically every three or five years — it can only stay the same or go up. It can never fall, even if the market has dropped. For decades, this has been standard practice in commercial leases across England and Wales. The government’s English Devolution and Community Empowerment Bill, currently at committee stage in the House of Lords, proposes to make these clauses unenforceable in new and renewal leases.
If you’re a tenant, this sounds like good news. And it is — in principle. But here’s the complication I keep coming back to when I talk to business owners. Landlords have relied on upwards-only clauses to secure predictable income streams and support lending valuations. If those clauses disappear, landlords may respond by setting higher base rents at the start of the lease, or by shortening lease terms to reduce their risk. The net effect might not be cheaper rent overall — just a different kind of cost structure. What I’d do in your position is model both scenarios: what your total occupancy cost looks like under an upwards-only lease versus a two-way review lease, before you sign anything.
Why the new service charge code changes everything
Service charges have long been a source of friction between landlords and tenants. You pay a proportion of the building’s running costs — cleaning, security, maintenance, insurance — but you rarely see a detailed breakdown, and disputes can drag on for years. The updated RICS Professional Standard, Service charges in commercial property (2nd edition), which took effect on 31 December 2025, is designed to change that. It’s compulsory for all RICS-accredited professionals, and it sets clear expectations around transparency, timeliness, and dispute resolution.
Here’s what that means in practice. Under the new code, budgets and year-end certificates must be delivered within specific timeframes. If your landlord or managing agent is RICS-regulated, they are professionally obliged to follow these standards. The code doesn’t override your lease terms — it’s not legally binding in itself — but it sets an industry benchmark that a tribunal or court would take seriously in a dispute. I’ve seen too many tenants accept opaque service charge demands because they didn’t know they had grounds to challenge them. The new code gives you a clear reference point.
If you’re entering a new lease, I’d recommend asking your solicitor to include a clause requiring the landlord to comply with the RICS code. Even if the code applies to them professionally, having it written into the lease removes any ambiguity. For a deeper look at how to handle service charge disputes, you might find this recent court ruling on service charges useful reading.
Where tenants get caught out — and how to avoid it
After covering this beat for a while, I’ve noticed three patterns that trip up even experienced business owners. Each one is grounded in the research, and each one has a fix.
Assuming security of tenure is automatic
Many tenants assume that when their lease ends, they have an automatic right to stay and negotiate a new one. That’s true under Part 2 of the Landlord and Tenant Act 1954 — but only if the lease hasn’t been “contracted out.” Contracting out means both parties agree in advance that the tenant will not have security of tenure. The Law Commission’s phase 1 consultation, which closed in February 2025, provisionally concluded that the current contracting out model strikes the right balance. But here’s the catch: the Commission also proposed increasing the minimum term for protected tenancies from six months to two years. If you’re signing a short-term lease, you could lose your renewal rights entirely without realising it. Always check whether your lease is contracted out, and if it is, understand exactly what you’re giving up.
Ignoring the energy performance timeline
The government remains committed to net zero, and the consultation on changes to Energy Performance Certificates closed in February 2025. The revised minimum EPC ratings planned by 2030 mean that many commercial buildings currently on the market will need significant upgrades to remain lettable. If you sign a ten-year lease on a building with a low EPC rating today, you could be stuck with a property that becomes non-compliant — and expensive to retrofit — halfway through your term. Before you commit, ask for the current EPC certificate and check what rating the building would need by 2030. If the gap is wide, factor the cost of upgrades into your rent negotiation.
Overlooking the Assets of Community Value reforms
The same Bill that proposes banning upwards-only rent reviews also includes wide-ranging changes to the Assets of Community Value (ACV) framework. Under the proposed reforms, the definition of community value would widen to include properties that contribute to economic wellbeing, not just social value. That means pubs, local stores, and even vacant buildings could be listed. If your business occupies a property that could be nominated as an ACV, you could face an 18-month moratorium on sale if a community group offers market value. This is a niche issue, but it could derail expansion or relocation plans if you’re not aware of it. Check whether your target property has been nominated or could be nominated before you sign.
→ Scroll right to see all columns
| Reform area | Current status | What it means for tenants |
|---|---|---|
| Upwards-only rent reviews | Bill at committee stage in House of Lords | Future leases may allow rent to fall; landlords may raise base rents |
| Service charge code | Effective 31 December 2025 | Stronger transparency and dispute resolution rights |
| Security of tenure | Phase 2 consultation expected Spring 2026 | Minimum term may rise to 2 years; check if lease is contracted out |
| EPC minimum ratings | Consultation closed Feb 2025; 2030 deadline | Buildings may need upgrades; factor cost into rent negotiation |
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How to negotiate a commercial lease in 2026 — a practical guide
The reforms I’ve described aren’t just background noise. They change how you should approach every stage of the leasing process. Here’s what I’d focus on, step by step.
Get professional legal advice before you sign anything
This is the single most important step. Commercial leases are complex documents, and the reforms underway mean that standard templates may not reflect your best interests. A property lawyer can review the lease for upwards-only rent review clauses, service charge provisions, security of tenure arrangements, and energy performance obligations. They can also advise on whether the property could be listed as an Asset of Community Value. If you don’t have a solicitor yet, you can speak to a tenant landlord lawyer online to get initial guidance on your specific lease terms. The cost of professional advice is small compared to the cost of a bad lease.
Negotiate service charge transparency from the start
The new RICS code gives you a strong negotiating position. Ask your landlord to confirm in writing that they will comply with the code, and request that this obligation is written into the lease. Specifically, ask for a clause requiring the landlord to provide a detailed budget at the start of each service charge year and a certified year-end statement within four months of the year end. If the landlord resists, ask why. A reputable landlord managing a well-run building should have no problem with this. For more detail on what to look for, read our guide on ensuring service charge transparency.
Model your rent under both review scenarios
With the ban on upwards-only rent reviews potentially coming into force in late 2026 or 2027, you need to plan for both possibilities. If you sign a lease today with an upwards-only clause, you’re locked into that structure for the term of the lease. If you sign a lease after the ban takes effect, the rent review will be two-way — meaning it can go down as well as up. Work out what your rent would be in three years under both scenarios, using conservative market assumptions. If the two-way scenario leaves you with significantly more headroom, it may be worth delaying your lease signing until the legislation is clearer. If you can’t wait, negotiate a rent review cap or collar to limit your downside.
Check the building’s energy performance trajectory
Ask for the current EPC certificate and compare it to the minimum rating required by 2030. If the building is already at or above that rating, you’re in good shape. If it’s below, ask the landlord for their plan to upgrade the building. Some landlords may be willing to include a clause requiring them to fund the upgrades, or to allow you to break the lease if the building becomes non-compliant. This is a forward-looking issue that many tenants overlook, but it could save you thousands in retrofit costs down the line. For a broader view of how legislation affects tenants, see our overview of essential UK legislation every commercial tenant should know.
Understand the hidden costs before you commit
Beyond rent and service charges, commercial leases come with a range of additional costs: business rates, insurance, utilities, repairs and maintenance, and potentially dilapidations at the end of the term. The Law Commission’s review is also looking at dilapidations law, which could change how much you’re liable for when you vacate. Before you sign, get a full breakdown of all expected costs and build them into your budget. A commercial lease checklist book can help you track what you’ve covered and what you haven’t. For a deeper dive, read our guide on the hidden costs of commercial renting.
Frequently asked questions
Can my landlord increase my rent if the market has dropped? ▾
What happens if my landlord doesn’t follow the new RICS service charge code? ▾
Can I lose my right to renew my lease without realising it? ▾
What should I do if the building I want has a low EPC rating? ▾
Could my business premises be listed as an Asset of Community Value? ▾
Do I need a solicitor to review a commercial lease? ▾
The commercial leasing landscape in the UK is changing faster than it has in two decades. The proposed ban on upwards-only rent reviews, the new service charge code, the security of tenure reforms, and the tightening energy performance requirements all point in one direction: tenants are gaining leverage, but only if they know where to look. My advice is to treat every lease negotiation as if the rules will change mid-term — because they probably will. If this was useful, you might also want to read Understanding turnover rent: essential tips for renting commercial space in the UK.
Sources and Further Reading
High street vs industrial estate: which is right for your UK business? — A practical comparison of the two most common commercial property types, including cost, footfall, and lease flexibility.
Tips for understanding market rent in the UK — How to research and benchmark market rent so you know whether the landlord’s asking price is fair.
Real estate update and 2026 expectations. Chambers, 2026.
UK real estate sector 2026 and beyond. Charles Russell Speechlys, 2026.
