The government’s surprise move to consider banning upwards-only rent reviews has landed like a bombshell in the property sector - and rightly so. For decades, this clause has been a foundational pillar of commercial real estate, offering landlords the certainty of ever-increasing rental income and protecting asset values for institutions, pension funds, and property investors. To strip it away would, in traditional terms, be a disaster for that system.
Institutional landlords have long relied on upwards-only clauses to guarantee growth in income, regardless of the economic climate or the tenant’s performance. It’s predictable, bankable, and has underpinned the way property has been valued, traded, and financed in the UK for generations. From an investor’s point of view, it’s a non-negotiable. Remove that certainty and you unravel a huge part of the confidence that sustains the commercial property market.
But here’s the thing: we’ve spent the past few years talking about partnerships. We’ve all said it - tenants, landlords, operators, investors - ‘we’re in this together’. That sentiment was shouted loudest during Covid, when the hospitality sector was on its knees, and landlords were suddenly confronted with the reality that empty restaurants and bars don’t pay rent.
Out of that crisis came new thinking: more prevalent turnover-based rents, hybrid models, more flexible lease terms. Landlords began sharing in the risk, and in some cases, the upside. It made sense. If you want to be part of someone’s success, maybe you should also feel some of their struggle.
So now, with this proposed ban, we’re being asked to prove whether that partnership language was genuine—or just a temporary mask worn in hard times. If everyone truly believes in mutual success, then a rent model that only ever moves in one direction no longer makes sense. You can’t have a partnership where only one side can win.
If everyone truly believes in mutual success, then a rent model that only ever moves in one direction no longer makes sense
Of course, it would be naïve to pretend there won’t be consequences. Removing upwards-only rent reviews will shake confidence in long-term valuations. It will force a rethink of investment strategies, particularly for institutional players who need dependable returns to meet long-term obligations. In the short term, there may be some real pain.
But maybe that pain is part of a necessary reset. A chance to build a fairer, more collaborative commercial landscape. In hospitality, where margins are tight and volatility is real, a lease model that flexes with performance isn’t just fair, it’s essential. It fosters better communication, better planning, and in the long run, probably more sustainable relationships.
And this isn’t just about restaurants. The implications go far beyond our sector. If this ban becomes law, it will mark a cultural shift in how space is leased and valued. It could change the DNA of landlord-tenant relationships across retail, logistics, even office space. It might be the start of a long-overdue evolution - or a full-blown revolution.
So yes, for some it may feel like the end of an era. But for others, it might be the beginning of a fairer one. And if we’re serious about being in this together, then maybe it’s time the rent model reflected that too.
Ted Schama is founder of advisory business One Voice Hospitality.