UPWARDS‑ONLY RENT REVIEW BILL: KEY CHANGES AND CURRENT STATUS

The Upwards Only Rent Review (UORR) Bill continues to move through the UK legislative process and has recently reached a significant milestone. Having passed through the House of Commons, the Bill is now progressing through the House of Lords, where it is undergoing detailed scrutiny before it can move closer to becoming law.

Refinements made in the House of Commons

The Bill has always stated that the ban would not apply to leases that already exist, but the House of Commons brought in further important limits on how underletting clauses work in those existing leases. If an existing lease says that any underlease must include an UORR clause, that requirement will no longer be valid. If such a requirement is in the underlease, the superior landlord also seems to lose the right to control any of the rent‑review terms in the underlease, even non‑UORR ones, like insisting that rent reviews in the underlease happen on the same dates as in the main lease.

This happens because the Bill states that if a lease would force an underlease to include a UORR clause, then the main lease will instead be treated as if it allows the tenant to put whatever rent‑review terms they want into the underlease. In that situation, the superior landlord gets no say in the rent‑review terms at all.

As a result, landlords may want to amend their existing leases (many of which currently require UORR clauses in underleases) before the Bill becomes law. Removing the UORR requirement now would let them keep some control over other rent‑review terms in future underleases.

The Bill also changes which tenancies are covered by the ban. Any business tenancy under a lease, including underleases, are covered by the Bill whether or not security of tenure is contracted out under the Landlord and Tenant Act 1954. This fixes a loophole in the earlier version of the Bill, which meant that if a tenant had sublet the entire property, the tenancy would fall outside the new rules.

Legislation Process and timing: For those readers that are interested in the process of passing legislation, the following sets out the process and alludes to the timing of making this law.

Current Stage: Committee Stage in the House of Lords

The Bill is presently in the Committee Stage within the House of Lords. This is one of the most detailed and rigorous phases of the legislative process.

Possible Bypass of the Report Stage

In some cases, where a Bill has been scrutinised by a committee of the whole House and no amendments are made, the legislation may skip the Report Stage entirely. In such instances, it moves directly to the Third Reading in the House of Lords.

Report Stage: Further Opportunity for Review

If the Bill does progress to the Report Stage, all Members of the House of Lords get another opportunity to re-examine the Bill, Propose further amendments, and debate the issues raised at Committee Stage.

Third Reading and Final Lords Approval

The Third Reading is typically the final chance for scrutiny, though the level of debate is narrower and more focused on tidying the Bill rather than making substantial changes.

If the Bill is approved at this stage, it completes its passage through Parliament and is submitted for Royal Assent, after which it becomes law.

When will it be passed as law?

Based on the current pace of progress and the remaining stages, it appears that, if the Bill is ultimately approved, Royal Assent is most likely to occur in 2027 or 2028.

Landlord’s should review their existing property portfolios and new investors should consider lease negotiations early on and seek guidance if they are not sure on what they need to do.

Contact Harshinder Hundal Commercial Real Estate Solicitors at FG Solicitors on harshinderh@fgsolicitors.com for a no obligation discussion.

Harshinder Hundal is a Commercial Real Estate Solicitor in Northampton and advises on Lease Management and Property transactions.

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  This update is for general guidance only and advice should be taken in relation to a particular set of circumstances.