Rent Review Options After the Upwards-Only Ban: A Practical Comparison for London Commercial Leases

Once you move beyond the headlines, the practical question becomes: what rent review structures are likely to be used instead, and how should landlords, tenants and their advisers compare them fairly at Heads of Terms stage? For commercial leases in London, the key issue is whether the reviewed rent is fully fixed or ascertainable at the outset, and whether the mechanism creates an upwards-only effect.

Below is a practical comparison framework to help you navigate discussions with agents, landlords, tenants and funders.

A) Start with the compliance question: is the reviewed rent ascertainable at grant?

The prohibition is directed at rent review mechanisms where the reviewed rent is not ascertainable at the time the lease is granted and the mechanism only permits increases, or guarantees a minimum increase.

Practical takeaway: when comparing options, the question often asked is whether a structure is “market standard”. Instead, the better question is whether it is structured so the future rent is known or determinable at the outset, or whether it creates an upwards-only outcome on a variable figure.

B) Common rent structures you will see in negotiations (and what to compare)

The right option depends on asset type, tenant covenant, sector volatility and bargaining position.

1) Fixed rent (no review)

• Compare: length of term, rent level, incentives such as rent-free periods or fit-out contributions, and break options.

• Watch: inflation and market movement risk sit entirely with one party depending on where the rent is set.

2) Stepped rent (pre-agreed increases)

• Compare: step dates, step amounts, and interaction with breaks and assignment or subletting.

• Why it is discussed now: stepped rents are commonly viewed as lower-risk from a compliance perspective because the future rent is specified from the outset.

3) Open market review (up/down)

• Compare: review assumptions and disregards, evidence, timeframes and any interim rent provisions.

• Why it is discussed now: market reviews may need to operate on a two-way basis, up or down, where an upwards-only effect would otherwise arise.

4) Index-linked review (with or without a floor)

• Compare: the index used, any cap, floor or collar, review frequency and compounding.

• Why it is discussed now: index-linked provisions can be caught where they create an upwards-only minimum uplift on a rent that is not ascertainable at the outset.

5) Turnover rent (with base rent mechanics)

• Compare: the definition of turnover, audit rights, base rent setting and review dates.

• Why it is discussed now: turnover-linked mechanisms can be caught where they replicate an upwards-only effect on a variable rent.

C) Heads of Terms: the comparison checklist questions to ask

To compare units properly, push for clarity on:

• What is the rent mechanism over time: fixed, stepped, index-linked, market, turnover or hybrid?
• If there is a review, can the rent decrease and on what basis?
• Does the lease include renewal options or arrangements, and how do they interact with the new regime?
• What is the wider commercial package alongside rent, including rent-free periods, stepped rent, service charge expectations and capital works?

Practical point: this is where comparison becomes most valuable. The headline rent is only one part of the overall package. The structure of the review mechanism, the timing of any changes and the interaction with renewal rights can all materially affect the commercial position over the life of the lease.

Next reads in the series

• Heads of Terms checklist (2026): rent review clauses, renewal options and the new rules

• Upwards-Only Rent Review Ban: What Landlords and Tenants Should Check in Commercial Leases

FAQs

Are fixed or stepped rents still viable under the new regime?

Fixed or stepped rents are generally viewed as lower-risk because the future rent is ascertainable at the outset.

Will market rent reviews now have to move down as well as up?

Once in force, the regime removes the enforceability of an upwards-only element in affected variable review mechanisms, so parties should plan for two-way operation where relevant.

When should we take advice - before or after Heads of Terms?

Ideally before Heads of Terms are finalised, because rent review mechanics agreed there are difficult to reverse later and may interact with renewal arrangements.

What should parties compare beyond the headline rent?

The headline rent is only one part of the wider commercial package. It is also important to compare incentives, review structure, break rights, renewal terms, service charge expectations and how the mechanism operates over time.

Why is this comparison exercise important now?

Because once the broad position is agreed at Heads of Terms stage, it can be difficult to revisit later. Comparing rent review structures properly at the outset can help landlords, tenants and advisers avoid unnecessary risk and negotiate terms more clearly.

Author Bio

An Le Tran is a Professional Support Lawyer in the Commercial Property team at Grant Saw Solicitors. She qualified as a solicitor in 2005 and has been part of Grant Saw since 2007, bringing close to two decades of experience in property law to her role. An Le focuses on driving best practice, efficiency and innovation across the team's work, supporting the delivery of practical, commercially grounded advice to landlords, tenants, investors and developers across London.

Commercial lease and renewal advice

Our Commercial Property team advises landlords, tenants, investors and owner-occupiers across London on new leases, lease renewals, Heads of Terms and rent review drafting.

If you are negotiating terms now, we can help you assess the practical impact on your proposed lease or renewal.

Call 020 8858 6971 or email commercial@grantsaw.co.uk to discuss your circumstances.

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Disclaimer

This article is for general information only and is not legal advice. Laws and guidance change and outcomes depend on facts. If you need advice on your situation, please contact us. Grant Saw Solicitors LLP is authorised and regulated by the Solicitors Regulation Authority.

Last updated: 6 May 2026