Draft legislation signals major shift for commercial landlords – What to do now to protect your interests
Since the government introduced draft legislation last summer proposing a ban on Upwards-Only Rent Reviews (UORRs) in commercial leases across England and Wales, Mason Thomas Law has been advising landlords on the likely consequences.
The proposals sit within the draft English Devolution and Community Empowerment Bill. With the Bill progressing through Parliament and subject to significant lobbying, it is not expected to become law until 2027/28 at the earliest. That window makes early action essential.
Mason Thomas Law’s Solicitor and director Cathy Thomas describes the proposals as ‘a fundamental rebalancing of risk in commercial leasing’.
She said: “This is a structural shift, not a technical tweak. Ireland’s 2010 ban on UORRs shows how quickly markets can change once legislation is introduced. I expect strong demand from landlords to contract out of the Landlord and Tenant Act 1954 well before any ban takes effect. Planning early avoids the last-minute rush we saw with the Stamp Duty Land Tax changes in 2025.”
Implications for landlords and investment
UORRs have long underpinned commercial property values by providing predictable income streams. Removing them introduces uncertainty around rental income, asset valuation and lending. This may make refinancing more complex and reduce appetite for long-term investment.
Landlords are therefore likely to respond by restructuring leases: increasing initial rents, shortening terms, tightening break provisions and limiting security of tenure. While the stated aim is tenant protection, the redistribution of risk may suppress development and investment.
Lessons from Ireland
Ireland’s experience is instructive. The 2010 ban was not retrospective, immediately creating a two-tier market. Tenants on new leases benefited from open-market reviews and falling rents after the financial crisis, while tenants on existing long leases remained locked into peak-market rents for multiple review cycles.
Rather than supporting established retailers, the change disadvantaged them. Long lease lengths of 20 – 25 years magnified the impact.
“Break clauses are critical,” added Cathy Thomas. “They give both parties flexibility and are essential risk-management tools in a changing market.”
Shorter leases likely
In Ireland, retail leases now typically run for five or ten years, with offices and logistics around 15 years. In the UK, retail leases already average four to seven years, but a further move towards five-year terms is likely, alongside increased contracting out of the 1954 Act to remove renewal rights altogether.
Act now
The draft legislation marks a clear move away from income certainty towards tenant protection. The commercial reality will depend on how decisively landlords act before the law changes.
Mason Thomas Law is urging landlords not to wait. Cathy urged: “Getting the right lease structure in place now is critical. Early advice allows landlords to manage rent and renewal risk properly, rather than reacting under pressure later.”
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