Commercial rent shake-up unveiled
Businesses across England and Wales will soon gain the legal right to negotiate lower rents on new leases under sweeping reforms to the commercial property system.
The government’s English Devolution and Community Empowerment Bill, published this week, will outlaw “upward-only rent reviews” for new contracts – a decades-old practice that has long favoured landlords and contributed to high street decline.
Under the proposed legislation, commercial landlords must choose between offering fixed rents or lease terms that allow rents to fluctuate both up and down. The move marks a significant departure from a system that, until now, has locked tenants into paying above-market rates regardless of changing economic conditions.
Boost for small businesses
Government ministers said the change is aimed at reducing retail vacancy, revitalising high streets, and easing pressure on small firms. “It will help end the blight of vacant high streets and the unacceptable antisocial behaviour that comes with them,” a spokesperson said.
Jim McMahon, local government minister, added: “Small businesses and community groups make an incredible contribution to our towns and cities. But in far too many places, they are being forced off the high street by spiralling rents. This bill will help deliver the plan for change.”
The reform follows last year’s introduction of “high street rental auction” powers, which allow councils to auction long-vacant retail premises to new tenants.
Mixed reactions from industry
The Federation of Small Businesses welcomed the legislation, calling it long-overdue support for struggling firms.
“This change should bring some relief for small businesses negotiating their next lease,” said Craig Beaumont, its executive director.
However, the property industry reacted with concern. Melanie Leech, chief executive of the British Property Federation, criticised the lack of consultation and warned the move represented unwelcome government interference.
“The government is getting mired in detailed market issues rather than focusing on the big picture,” she said.
Historic policy shift
Although the measure was not included in Labour’s 2024 election manifesto, the policy has a long history in party politics. Labour first highlighted upward-only clauses as a “source of grievance” in its 2001 manifesto under Tony Blair but failed to act at the time.
Now, ministers hope the long-delayed intervention will not only support small businesses but also shift commercial leasing norms nationwide. While existing leases will remain unaffected, new agreements will no longer be allowed to include the restrictive clauses.
Levelling up through leasing
As part of a wider agenda to decentralise power and revamp local economies, the rent reform is a flagship element of the new bill. By enabling more flexible lease negotiations, the government hopes to breathe life back into vacant town centre properties and encourage long-term business resilience.
Whether the reform marks a turning point for high streets remains to be seen, but for many tenants, the long-awaited ability to negotiate downward could be a lifeline.
