A rent review is the moment your landlord can reset the rent midway through your lease — often the single biggest cost jump a small business faces without moving premises. Your lease sets out when a review happens, how the new rent is calculated, and what happens if you disagree, but most tenants first read that clause when the landlord’s proposal letter lands. This guide covers the three review methods, the hidden assumptions in an open market review, the process step by step, and the levers that can keep the increase fair.
What a Rent Review Clause Actually Does
A rent review clause lets the rent be reassessed at agreed intervals, typically every three or five years — on a ten-year lease, say, in years three and six. The clause is contractual: unlike a lease renewal, where statute plays a large part, there is no general statutory rent review regime for commercial leases in England and Wales. Everything turns on what your lease says, so read the clause itself first.
Two points surprise tenants. First, the landlord is usually not obliged to trigger a review; if market rents have fallen, a landlord may let the date pass, and the rent stays put until the next review. Second, until the new rent is agreed or determined, you keep paying the old rent, then pay the shortfall backdated to the review date, usually with interest — a review dragging on for a year can produce a lump-sum back payment of several thousand pounds. If you are still negotiating your lease, our guide to negotiating a commercial lease explains which review terms are worth fighting for before you sign.
The Three Review Methods
| Method | How the new rent is set | Main risk for tenants |
|---|---|---|
| Open market review | What a willing tenant would pay on the open market at the review date | Valuation arguments over comparables and assumptions |
| Index-linked review | Rent moves with an inflation index, usually RPI or CPI | Inflation spikes you cannot control or challenge |
| Fixed uplift review | Rent rises by a set percentage or amount at each review date | Predictable, but can drift far above market rent |
Open market review
This is the most common method, and the most argued over. A surveyor estimates what the property would achieve if let on the open market at the review date, on your existing lease terms, using comparable lettings nearby. The headline figure is only as good as those comparables: a refurbished unit next door, a deal with a long rent-free period, or a unit with a different permitted use can distort the comparison if not adjusted properly.
What really decides an open market review is the small print: the assumptions and disregards. The clause typically assumes the property is in the condition the lease requires, is available with vacant possession, and is let for the same use and term, and it usually disregards your own improvements, any goodwill, and the fact that you are already in occupation. If your improvements are not disregarded, you could pay higher rent for value you created yourself — check that list line by line before accepting any valuation.
Index-linked review
Here the rent moves in line with a recognised index, most often the Retail Prices Index (RPI) or the Consumer Prices Index (CPI). If the index rises by 4% between reviews, the rent rises by 4% — predictable and cheap to administer, with no valuation dispute, but the rent follows inflation even if local market rents have fallen. Watch for collars and caps: a collar sets a minimum increase, a cap a maximum, and either can quietly change the deal.
Fixed uplift review
The simplest method: the lease states the new rent in advance, such as a 3% increase each year or a fixed sum at each review date. There is nothing to argue about. The danger is drift: over ten years, a fixed 3% annual uplift compounds to roughly a 34% increase, which may leave you paying well above market rent in a weak market.
A Worked Example: How the Numbers Move
Suppose you pay £30,000 a year. Under an open market review, your landlord’s surveyor proposes £36,000, citing two nearby lettings. Your own surveyor argues those comparables include rent-free periods worth 10% of the rent and a superior fit-out, and puts the true market rent at £33,000 — a £3,000 gap worth £15,000 over five years. Under an index-linked review, a 4% rise in the index simply takes the rent to £31,200. Under a fixed 3% annual uplift, the same rent becomes £30,900 after one year and about £34,800 after five years. The method matters as much as the market: understand which formula produced the figure before you argue about it.
The Upward-Only Question — and the Coming Ban
Most open market review clauses in older leases are “upward-only”: the rent can rise to the market figure, but if market rents have fallen it stays at the level already being paid. That ratchet is why a landlord may trigger a review in a rising market and ignore one in a falling market, and if your lease predates any reform, that clause remains enforceable for the rest of its term.
Change is coming, but it is not here yet. The English Devolution and Community Empowerment Act 2026 will ban upward-only rent reviews in new and renewal business leases in England and Wales. At the time of writing (November 2026) that ban is not yet in force, and it is currently expected to take effect in 2027 or 2028 — despite some pages already claiming a March 2026 ban. Until commencement regulations are made, treat upward-only clauses in existing leases as live, and in any new lease push for a two-way review.
The Review Process, Step by Step
- Read the clause. Note the review dates, the method, who may trigger the review, and whether time is of the essence for any step — missing a deadline can cost you the right to challenge a figure where the lease has a deeming provision.
- Check the trigger notice. It must be served correctly, on time, and in the form the lease requires. A defective notice can sometimes be challenged, so take advice before conceding its validity.
- Counter-notice if you disagree. Respond within the stated period with your own figure and reasoning; silence can count as acceptance under some clauses.
- Negotiate on evidence. Exchange comparables with the landlord’s surveyor, challenge any involving incentives, different uses, or superior condition, and insist your improvements are disregarded as the lease requires.
- Refer to a third party if needed. Most leases provide for an independent expert (quick, informal) or an arbitrator (formal, under the Arbitration Act 1996), usually appointed through RICS, with fees commonly shared equally. Record the outcome in a signed rent review memorandum stating the new rent and its start date.
- Budget for back rent. Pay the difference between old and new rent from the review date, plus any interest, and update your cash-flow forecast.
Negotiation Levers Worth Using
Start early, ideally six months before the review date. Gather your own comparables, including weak lettings the landlord’s surveyor has omitted and incentives hidden in headline rents. Be honest about condition: disrepair you must remedy counts against you, but defects in the landlord’s structure or common parts may support a lower figure. Offer something in return for a lower rent, such as a longer term or surrendering a break right — landlords often trade rent for certainty. And check the wider lease first, as our guide to when to use a break clause explains. The key terms of a commercial lease and the rules on lease renewal and security of tenure are also worth re-reading, since renewals and reviews often overlap.
Mistakes That Cost Tenants Money
The most expensive mistake is ignoring the review letter; under some clauses, silence means the landlord’s figure stands. The second is accepting the first proposal without comparables of your own. The third is paying for your own improvements twice, by failing to check the disregards exclude them. The fourth is forgetting the back payment: a review settled a year late at £3,000 a year higher means a £3,000 lump sum plus interest.
Frequently Asked Questions
Can my rent go down at a review?
Under an upward-only clause in an existing lease, no: the rent stays at its current level even if market rents have fallen. Under a two-way open market review, an index-linked review with no collar, or a future lease caught by the coming ban, it can. Check your clause before assuming either way.
What if my landlord serves the review notice late?
It depends on whether time is of the essence for that step under your lease. Time is generally presumed not to be of the essence, and courts have upheld trigger notices served more than a year late where the lease did not make time essential. If time is of the essence and a deadline is missed, the right to review may be lost until the next date. Take advice immediately if either side misses a date. Note also that each side commonly bears its own surveyor’s costs, while a third-party appointee’s fees are shared equally. This article is general information, not legal advice; take professional advice on your own lease.