Rent reviews: how to handle a rent increase on your commercial lease

You’ve signed a commercial lease and moved your startup into new premises. You know the quarterly rent, but what happens when that changes?

In 2025, rising costs are hitting businesses hard, including in commercial rent. And even with a good deal, most long-term leases include rent reviews, where landlords can propose increases.

While the government is proposing a ban on upward-only rent reviews, that doesn’t mean increases are off the table completely. As a tenant, it’s important to understand how to challenge rent increases and negotiate fair terms.

Below, we’ll share everything you need to know about commercial rent reviews and how negotiating through them works.

What is a rent review?

A rent review is a clause in a commercial lease that allows the landlord to periodically reassess and potentially adjust the rent you pay.

Rent reviews usually happen at set intervals, often every three to five years. Your landlord will value the premises and review the rent they’re charging you for it, to adjust the amount so that it better aligns with current market conditions and the state of the property.

Government set to ban upwards only rent reviews

In July 2025, the UK government introduced the English Devolution and Community Empowerment Bill, which proposed a ban on upward-only rent reviews across England and Wales.

This means that any upward-only rent review clause within a new or renewed commercial lease will not be enforceable. Instead, rent would be calculated based on fair market conditions at the time of review – meaning it could go up, stay the same or even decrease, depending on the market.

Index-linked reviews – where rent changes based on inflation measures like the Retail Prices Index (RPI) or Consumer Prices Index (CPI) – would still be allowed, but only if the rent is allowed to decrease as well as increase, depending on how the index moves.

In other words, rent increases aren’t going away completely, and the new legislation won’t cover stepped or fixed rent increases. It just means that tenants could benefit from more balanced reviews that reflect current market trends, rather than being locked into automatic rises.

How do rent reviews on commercial leases work?

There are several methods by which your landlord might carry out a rent review.

The process your landlord is required to follow will be set out in the rent review clause of your commercial lease. So, to get the clearest idea of how yours will work, the best thing to do is to read that clause thoroughly.

In general, though, it’s likely that your landlord will look to work out your new rent in one of three ways:

• Open market rent review: the rent is adjusted to reflect the current open market value for similar properties.
• Index-linked rent review: rent is charged automatically based on the movement of the chosen index (RPI or CPI).
• Stepped or fixed rent increases: the lease may include pre-agreed (“fixed” or “stepped”) rent increases at certain intervals.

Fortunately, if your rent increases, you don’t have to accept the new rent your landlord proposes. Any increase at all can be subject to review, debate and negotiation.

Negotiating a rent review: the process

While each rent review can differ, in general, a rent review negotiation is likely to follow these stages:

1. Your landlord will send a written notice detailing the proposed rent increase.
2. You and your advisor respond with a counter notice rejecting the increase.
3. Your advisor negotiates with the landlord to agree on a new rent.
4. If no agreement is reached, a third party is appointed to resolve the dispute.

But that’s far from all there is to it. Before a negotiation can get going in earnest, you’ll need to understand some crucial elements of the rent review process.

Understanding your rent review clause

The rent review clause of your commercial lease will explain everything you need to know about your reviews, so it’s worth reading and digesting it, even if you’re not expecting a review anytime soon.

The clause should explain:

• How your landlord is to conduct the rent review process
• The process that any negotiations need to follow
• How any disputes between you and your landlord are to be solved

As well as this, the clause will detail some crucial dates and timescales that you’ll need to make note of in your diary. These include:

Your rent review dates

It’s important that you’re well aware of the dates on which your rent reviews are going to take place. It may seem unnecessary, but it’s actually worth considering your rent review strategy as far as 18 months in advance. You should: 

• Locate the Rent Review Clause: this is usually found in the main body of your commercial lease, usually under “Rent Review”, “Review of Rent” or “Adjustments to Rent”.
• Check the review dates: look for when reviews are scheduled and make note of the next review date.
• Look at the review process: your lease should outline who initiates the review (landlord, tenant or either), how notice must be served, timeframes for responding and what happens if you can’t agree.
• Seek professional advice: commercial lease terms can be complex, so you should consider hiring a commercial property solicitor to help you interpret the clause, prepare for negotiations, challenge unfair increases and ensure compliance with the upcoming 2025 rules.

When should you hire a rent review advisor?

It’s best to get the assistance of a professional as early in the process as your lease allows. That way, they can start monitoring your local rental market and gathering evidence for what they believe your rent should be.

You don’t want to miss out on the opportunity to have a professional on your side, so be sure not to miss your deadline for hiring one.

How much notice must your landlord give?

Your landlord will need to inform you in good time if they’re planning to increase your rent. Typically, they’ll be required to send the trigger notice with three months’ notice, although this won’t be the same for everyone.

You should be aware of this timescale as it may be that, if your landlord doesn’t inform you of an impending rise ahead of the deadline for doing so, they no longer have the right to impose the increase.

How long will you have to start negotiations?

This ultimately depends on your lease. Usually, there’s a set time to respond to your landlord’s notice, challenge a rent rise and start negotiations.

Some tenants have paid higher rents because they missed this deadline. To avoid this, keep your deadline in mind. Plus, if the English Devolution and Community Empowerment Bill passes, be sure to challenge any rent increases that don’t follow the new rules.

Hiring a professional advisor

We would strongly advise enlisting the professional services of a rent review surveyor or advisor. They can help you research the local rental market, value your property and determine the rent you should rightfully pay. They can also negotiate with your landlord on your behalf, so that the rent review process is fair.

Hiring professional help will, of course, be more expensive than doing it yourself, but an advisor/surveyor should easily make up for what they’ve cost by securing you the best rent possible.

How to find the right surveyor/advisor

To find a suitable rent review surveyor/advisor, try consulting:

• The RICS: this organisation, the Royal Institution of Chartered Surveyors, can provide a list of suitably experienced chartered surveyors in your area.
• Local Surveyors Direct: allows you to input your property details and postcode to find local surveyors specialising in rent reviews.
• Other business tenants in your area: they may be able to provide recommendations for surveyors/advisors they’ve worked with.
• Your property agent: if you used an agent to acquire your property, they’ll probably have, or be able to recommend, a suitable surveyor/advisor.

Before you choose an advisor/surveyor, ask all of your options for a written proposal outlining what they will do for their fee. This is a good way to establish who will work best on your behalf.

Remember: the agent offering the lowest fee may not always be the best candidate.

How much will a rent review surveyor/advisor cost?

The fees you pay a rent review advisor will largely depend on the size of the premises or the complexity of the case. Here’s a quick rundown of the typical costs:

Understanding the market

Understanding the local rental market is essential when negotiating your rent. To suggest a fair figure, you’ll need to research nearby properties similar to yours  – with comparable lease terms – and see how their rents stack up.

It’s best to do this well before your rent review date, so you’ll be ready if your landlord suggests a higher rate than expected. If you have a professional advisor, they can handle much of this research for you.

You should compare:

• How old the building is
• The condition it’s in
• Building specifications
• Amenities (e.g. air con, heating, plumbing)
• Location
• The property’s most valuable potential use

Note: Rent is usually based on a property’s highest-value use, even if you’re using it differently. For example, if your space could be used as an office but you use it for storage, the rent may still reflect office rates. Keep that in mind when comparing.

Taking improvements into account

If the property has improved structurally or aesthetically since you moved in, your landlord might try to raise the rent based on those changes.

If the landlord paid for these improvements, then this is normal. However, if you funded them yourself, the rent shouldn’t increase because of it (though landlords may still try).

That’s why it’s important to keep records of any improvements you pay for, so you can prove it and protect yourself from unfair rent hikes.

What other factors will help my negotiations?

Alongside the expertise and negotiating prowess of your advisor – plus the reasonableness of your new rent request – several other factors might help your cause.

For example, your counter proposal is likely to be considered more favourably by your landlord if:

• You’ve been a good tenant who always pays rent and charges on time
• Your landlord hasn’t always lived up to their obligations
• The local property market is slow, and your landlord would find it difficult to find a new tenant if you ended your lease

Solving an ongoing dispute

In some cases, you and your landlord will be unable to agree on a new rent. Your landlord may use delaying tactics – holding off on agreeing to a new rent in hopes of benefiting from an increasing rental market (which, though frustrating for tenants, does happen).

The good news is that such disputes can be solved and your commercial lease will tell you exactly how it should be done.

In most cases, however, your lease will instruct that you appoint a third party, such as a local chartered surveyor specialising in rent reviews, to make the call.

This third party can be placed in one of two roles. Your lease will explain whether they need to act as:

• An arbitrator: the third party would consult both you and your landlord, and listen to and assess your arguments. They would then decide on the new rent based on these cases.
• An independent expert: the third party would use their own expertise to decide on the new rent, often without consulting you or your landlord at all.

Once a third party gets involved, it’s often the case that the dispute is solved within a couple of months. But be aware that it may cost both you and your landlord around £1,000 each to appoint this party.

If you’re still not happy with the result, you might be able to appeal to the court, although this may be an expensive process for you.

Is coworking a better alternative to a commercial lease?

Coworking has become a popular alternative to traditional commercial leases as it offers businesses, sole traders and freelancers access to desks and private rooms on flexible terms.

Many coworking spaces also come fully furnished, with access to amenities like Wi-Fi, meeting rooms and communal areas, without the long-term commitment or typical overheads of a traditional lease.

Coworking has proven to be a go-to for many businesses across the UK, with 59% of firms saying that it’s the best fit for their needs. What’s more, with the average cost of commercial property in England predicted to rise by 19.15% by 2034 (from £94 to £112 per square foot), many small businesses are having to rethink their commitments and explore alternative options.

The cost of coworking doesn’t have to be a fortune either. The average cost of coworking ranges from £150-£350 per month, depending on which city you’re based in. However, the monthly cost can be even lower for the cheapest coworking spaces, starting from just £65 per month.

What are the pros and cons of coworking?

While coworking can be a cheaper and easier alternative to traditional commercial leases, it does come with some downsides, too. Here are the main advantages and disadvantages to consider:

Conclusion

Commercial rent reviews can be complicated, especially with rising costs and changing regulations in 2025.

But you can get around it smoothly by fully understanding your lease, knowing your rights, and getting expert advice early on. This will help you to protect your business from unfair rent increases and negotiate a fairer deal if needed.

And if your current commercial lease isn’t working out for you – or you just don’t have the budget right now – alternatives like coworking spaces can offer a more flexible, cost-effective solution.

All in all, it’s all about finding the right setup for your business – whether that means renegotiating your rent, downsizing or moving somewhere that fits better.