knowledge 22 August 2025 |

Proposed UK Ban on Upward-Only Rent Reviews – Key Points for Irish Landlords and Tenants

The UK Proposals

• Rent review clauses that can only move the rent upwards (whether open-market, index-linked or turnover based) to be unenforceable.
• Where a lease allows only the landlord to initiate a review, the tenant will now have an implied right to do so.
• Applies to business tenancies.
• Prospective only – existing leases and agreements for lease signed before commencement are unaffected.
• Any side arrangement that seeks to claw back a prohibited uplift to be void.

How the Ban will Operate

In summary, for new business tenancies granted after the legislation has come into force, where a rent review clause sees rent varied by reference to a variable factor, say, market rent, an indexation figure or a turnover formula, then the new reviewed rent cannot exceed the “reference amount”. The reference amount is the amount determined by the variable factor. Any provision in the lease that would result in the reviewed rent being higher than the reference amount (ie an “upwards only” mechanism, such as the “higher of passing rent or open-market rent”) will be of no effect. Additionally, there are two statutory rights designed to ensure a review takes place even if the landlord is inactive:

1. tenant may serve the review notice where the lease reserves that right to the landlord; and
2. tenant may progress procedural steps (eg appointing a valuer) if the landlord does not co-operate.

The Bill applies the same rules to rents of leases entered following the exercise of landlord-driven put options. Such options are defined in the draft legislation as any arrangement under which a landlord (or another person) can compel the tenant to take a fresh lease of all or part of the same premises.

Regulations may define limited exceptions (eg, specialist asset classes) but this would require parliamentary approval.

High-Level Comparison with Irish Law

General Updates
Start date	UK: TBC – prospective only IE: 28 Feb 2010 – prospective only
Leases affected	UK: New “business tenancies” (and renewal leases under Landlord and Tenant Act 1954 (“LTA”)) IE: New commercial leases and renewals treated as new leases
Review mechanisms covered	UK: Market, index, turnover; any “higher of” formula IE: All review mechanisms, though purely index-linked uplifts arguably not a “review”
Stepped increases	UK: Not covered IE: Not covered
Caps and collars	UK: Bill’s explanatory memorandum states regulations may be created to make exceptions for caps and collars to be used with parameters IE: Sometimes used in the market
Statutory cap	UK: Rent may go up down, or stay flat, but cannot exceed “reference amount” determined by the chosen variable eg market rent IE: Rent may go up, down or stay flat
Tenant ability to trigger review	UK: Yes – statutory right IE: No such statutory right
Put options	UK: Initial rent also capped IE: No statutory rule
Anti-avoidance	UK: Side payments/claw-backs void IE: Not expressly addressed; market perceives certain work-arounds (eg landlord-only activation)
Legal instrument	UK: Proposed s. 54A & Schedules 7A/7B LTA IE: s. 132 Land and Conveyancing Law Reform Act 2009

Practical Implication for Stakeholders

• “Stepped rent” schedules remain outside the UK ban, mirroring current Irish practice. Parties seeking income certainty may therefore continue to deploy fixed uplifts in both markets.
• Lenders with security over UK assets may revisit covenants and valuation methodologies, as Irish lenders did post-2010.
• Landlords may see tenants of Irish property seeking a contractually agreed right for a tenant triggered rent review to align with what will likely by the statutory position in the UK.

What happens next?

We will continue to monitor the UK Bill along with any proposed secondary regulations. If the Bill is enacted, investors holding assets in both jurisdictions will be subject to broadly similar, but not identical, regimes. Irish-style drafting for rent review clauses (allowing bilateral movement) can provide an immediate template for UK-leases that would previously have had an upward-only review.