Upward-Only Rent Review Ban Likely to Have Minimal Impact on High Street
In an article first published by CoStar, a Colliers economist examines the proposed ban on upward-only rent reviews (UORRs) in the English Devolution and Community Empowerment Bill, which has reached committee stage.
The government's aim is to stop high street shops closing because of rising rents. However, the article argues the measure was introduced with little or no consultation and could have unintended consequences for commercial property.
Colliers points out that lease lengths have already shortened as tenants seek flexibility: the average across all asset classes fell from around 11 years in 2010–2014 to nine years in 2020–2024. High street shops have some of the shortest leases, often with early break clauses, so their rents already sit close to market levels. By contrast, supermarkets (15.1 years), leisure (13.2), distribution warehouses (11.2) and retail warehouses (9.7) have much longer leases, meaning the ban could affect those sectors more than the high street it targets.
After years of retail rent rebasing, UORRs are seen as far less significant to high street tenants than rising national insurance, minimum wage costs, business rates and the removal of tax-free shopping.
For investors and developers, the ban would change risk profiles and yields. Investors might seek higher initial rents and offer shorter rent-free periods, while developers could look for more forward commitments and avoid speculative schemes if lenders price in greater risk. Leasing practice may move closer to continental European models, with more frequent reviews and flexible structures.
The author contends that structural factors such as online shopping, changing consumer behaviour and surplus retail space matter far more than rent review terms, describing the ban as more cosmetic than therapeutic and criticising the government's characterisation of the landlord–tenant relationship. The Bill could remain in committee until 12 November, and the sector is urged to set out the likely real-world impacts.
