What the UK can learn from Ireland’s ban on upwards-only rent reviews

Posted on: 4 August, 2025

By David Hourihan
Programme Leader, MSc Real Estate

With a ban on upwards-only rent review clauses under consideration in the UK, University of the Built Environment senior lecturer David Hourihan examines the Irish experience and why its impact may not have been as disruptive as feared.

As the UK government prepares to debate the proposed ban on upward-only rent review clauses in commercial leases, it is worth looking across the Irish Sea for lessons. The Republic of Ireland implemented a similar ban back in 2010 and, despite initial concern, the move had a far more modest effect on the property market than many predicted.

What is an upwards-only rent review?

The cornerstone piece of legislation governing ‘business tenancies’ in the UK commercial property market is the Landlord and Tenant Act 1954.  Historically, business tenancies have had rent reviews every 3 to 5 years, and the rent review clauses have usually been ‘upwards-only’.

This meant that the rent could only be increased or stay the same at the review date, but could not be reduced even if the ‘market rental value’ for the property had decreased below the ‘passing’ rent. This feature of the UK market provided a degree of certainty for landlords, particularly during times of instability in the marketplace.

For tenants, however, the upwards-only clause unfairly locked them into paying above-market rents during recessionary downturns.

Radical change

Commercial property markets have radically changed in recent years with the growth of online shopping and the impact of the pandemic. In the UK, these changes have prompted the Law Commission to review the ’54 Act to ensure that this legislation remains relevant and effective.

One key focus of this review has been on ‘upwards-only’ rent review clauses in modern business leases. On 10 July this year, the English Devolution and Community Empowerment Bill was introduced to the UK Parliament. Schedule 31 of the Bill seeks to ban upwards-only rent review clauses in business leases when they are renewed or a new lease is granted.

Strong reactions to proposed ban

There have been some strong reactions from UK market commentators who have stated that this proposed ban could adversely affect the attractiveness of commercial property investments. Some stakeholders see the Bill as government ‘interference’ and that it will ‘damage’ the wider economy.

The Bill may take several months to pass through parliament, and it is unclear what elements will remain in the final draft.

Comparison with Republic of Ireland

In the meantime, it is interesting to observe that a similar ‘upwards only’ ban was introduced in the Republic of Ireland in 2010. Back then, 15-20-year Full Repairing and Insuring (FRI) leases with upwards-only rent reviews on prime commercial properties were common in Ireland.

There were concerns that this ban in Ireland would result in a two-tier market between leases granted before and after the 2010 ban. Indeed, valuers did explicitly note the difference when determining what yields to adopt in the valuation process.

Landlords also introduced ‘landlord-only trigger notices’, ‘index-linked rent reviews’ and ‘caps & collars’ into rent review clauses of new Irish leases. These changes have yet to be challenged in Irish courts.

Reasons for nominal impact

Overall, however, the impact of the upwards-only ban on the Irish economy was considered nominal because:

• The Irish upwards-only ban was introduced at the bottom of the property cycle when rents were rising and the risk of the ban to landlords was considered low.
• The Irish markets quickly moved on and ‘green’ clauses have since become a much more important consideration in the marketplace in terms of their effect on pricing (rents and yields).
• International investors present in the Irish market were already used to flexible lease arrangements. It was mainly the domestic investors who believed the ban would damage the local market.
• New leases are now a lot shorter in duration, so tenants are less exposed to ‘over-rented’ situations.

As the Bill progresses through Parliament in the coming months, its final form remains uncertain. But the Irish precedent suggests that, with the right market conditions and investor adaptability, the UK may find this shift less disruptive than expected.

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