Lease Advisory
A market at a crossroads - The UK’s upward-only rent review ban
The UK commercial property market is on the cusp of dramatic change. The government’s plan to ban upward-only rent review (UORR) clauses in new and renewed commercial leases is now formally contained within the English Devolution and Community Empowerment Bill, which is currently in the early stages of the parliamentary process. There is no firm or immediate timescale for implementation, and the exact date the ban might come into force is still being determined through parliamentary scrutiny and potential industry lobbying.
The Bill was introduced to Parliament on 10 July 2025, with its second reading taking place on 2 September 2025. It was then sent to a Public Committee on 12 November 2025 for detailed analysis and potential amendments, with the committee expected to report by that date. The Bill must still pass through several further stages in both the House of Commons and the House of Lords before it can become law. Government impact assessments have suggested that implementation might be scheduled for 2027 or 2028, indicating a longer-term plan. However, other industry sources have indicated that it could become law within the next 6 to 12 months, though this remains uncertain given the potential for lobbying and ongoing parliamentary debate.
Crucially, the ban will not apply retrospectively to existing leases, only to new leases and those renewed after the legislation comes into force. The final form of the legislation could be subject to change as it progresses through Parliament.
The proposed reforms will apply to all new commercial leases and renewals in England and Wales, including those governed by the Landlord and Tenant Act 1954. Existing leases will remain unaffected, providing some comfort to current landlords and tenants.
Upward-only clauses, whether linked to market value, inflation, or turnover, will become unenforceable. Rent reviews must allow for both increases and decreases, and tenants will gain the right to trigger reviews, even if that right was previously reserved for landlords. Robust anti-avoidance measures are planned, and only fixed or stepped rent increases (where the amount is clear from the outset) will remain permitted.
While the suggested reforms have a long way to go before becoming a reality, the government’s decision has already created market uncertainty among landlords and the UK investment market at a time when
businesses need confidence. For many decades, upward-only rent reviews have given the UK property market a competitive edge over other international markets. Removing this mechanism could negatively affect inward investment and capital values, forcing tenants to pay higher rents to maintain the same capital value. The UK investment market is not geared up to have rent reviews that can go up as well as down; it is driven by predictability and income certainty from the landlord side.
The reforms aim to create fairer lease terms and reduce costs for tenants, but the sudden introduction, without prior consultation, has unsettled the market. Landlords and investors now face the prospect of increased income volatility, less predictable valuations, and potentially reduced investment appetite, especially among risk-averse institutional investors.
As the Bill progresses, all stakeholders, landlords, tenants, investors, and advisors, must stay alert to the evolving legislative landscape. The coming months will be critical in shaping the future of the UK’s commercial property market. The final form and timing of the ban remain subject to parliamentary debate and possible amendment.
Quantifying the EPC premium
In the dynamic world of commercial real estate, energy performance has evolved from a regulatory checkbox to a powerful financial lever.
A groundbreaking study by Qiulin Ke from University College London and Michael White of Nottingham Trent University, published by Taylor & Francis, underscores that energy efficiency is not just about being green, it’s a strategic business move.
Their research, titled Does Energy Performance Rating Affect Office Rents? A Study of the UK Office Market, dives deep into the UK’s office sector, examining how Energy Performance Certificate (EPC) ratings influence rental values. The results are clear: properties with top-tier EPC ratings (A or B) command significant rental premiums, highlighting the financial benefits of energy efficiency for landlords and investors.
• Properties with EPC ratings of A or B enjoy rental premiums of 10–15%
• In regional markets, tenants are willing to pay 12% more for EPC B-rated offices compared to lower-rated ones
• In London and major regional centres, EPC A-rated offices consistently achieve a 15% premium
These figures send a strong message: the market is now rewarding energy efficiency, and the financial incentives for landlords to invest in sustainable upgrades are substantial.
The EPC system is a cornerstone of the UK’s efforts to decarbonise its built environment. With ratings ranging from A+ (most efficient) to G (least efficient), these certificates reflect a property’s energy consumption and carbon emissions. As government policies increasingly focus on net zero targets, the urgency for landlords to upgrade their assets has never been greater.
Historically, energy performance was a “niceto-have” for tenants with strong sustainability mandates. Today, it has become a “musthave,” with corporate occupiers demanding proof that buildings support their ESG goals and operational efficiency.
Ke and White’s study reveals nuanced market dynamics. In regional markets across the UK, the appetite for better-rated offices is strong, with a 12% premium for EPC B-rated properties. In London and key regional centres, the competition for top-tier space is even fiercer: EPC A-rated offices reliably attract a 15% rent premium.
This split reflects the priorities of occupiers: in London, where corporate reputations and regulatory scrutiny are high, the best buildings enjoy heightened demand. Regionally, the financial case for upgrading to B-rated stock is clear, with tenants recognising both operational and reputational benefits. To understand the practical implications for landlords and investors, we consulted our lease advisory team and net zero specialists, including Rupert Collis, Head of Commercial Lease Advisory, Partner Ishfaq Hussain, Sustainability Adviser Philip Chapman, and ESG Partner Rachel Bridge.
Rupert noted, “This research validates what we are seeing in transactional activity. Energy efficiency is no longer a fringe consideration; it’s now a key driver for tenants evaluating office space. Landlords who proactively upgrade their buildings are not only futureproofing their assets against regulatory changes but also unlocking significant rental upside. The data shows that occupier willingness to pay for superior EPC ratings directly translates into higher asset income.”
Ishfaq added, “There’s a clear shift in occupier expectations. The rental premium for EPC A
Don’t hesitate to contact a member of the team:
Rupert Collis
Head of Lease Advisory 01565 745324
rupert.collis@fishergerman.co.uk
Richard Beaumont
London & South East 020 7747 3183
richard.beaumont@fishergerman.co.uk
and B-rated buildings is a powerful incentive for landlords to invest in energy upgrades. It’s also a crucial lever in lease negotiations, giving well-rated properties an edge and improving their leverage in rental discussions. For landlords, the calculus is straightforward: improved energy performance equals improved returns.”
Philip commented, “The path to net zero is a collaborative endeavour, requiring alignment between landlords, property managers, and occupiers. This study provides compelling evidence that the market is rewarding energy efficiency, not just with goodwill but with tangible financial benefits. As we support clients in navigating their net zero journeys, delivering enhanced EPC ratings should be at the forefront of asset management strategies.”
Read the full article here:
Ishfaq Hussain Midlands 0121 827 6673
ishfaq.hussain@fishergerman.co.uk
Jonathan Butler North East 01302 243926
jonathan.butler@fishergerman.co.uk
