Rent review clauses: open market, index-linked, fixed and upward-only

What does a rent review clause do?

It lets the rent change during the lease, usually on set review dates. The clause should say when reviews happen, how the new rent is worked out, who can start the review and what happens if you can’t agree. This guide covers business leases in England and Wales.

The RICS Code for leasing business premises requires surveyors to record any rent reviews, their frequency and their basis in the heads of terms, and recommends that review clauses are clearly expressed and that either party can start the review.

What are the main types of rent review?

• Open market review. The rent moves to the open market rental value of the property at the review date (the traditional method, per the RICS Code, Appendix B5), on assumptions set out in the lease. Those assumptions matter, so check them with your solicitor. The Code says the formula should disregard value added by the tenant’s improvements (other than under an obligation) and value arising from the tenant’s business.
• Index-linked review. The rent increases in line with a published index such as the Retail Prices Index (RPI) or Consumer Prices Index (CPI) (RICS Code, Appendix B5). Look for caps (a maximum rise) and collars (a minimum rise), which the Code also refers to.
• Fixed or stepped increases. Increases agreed before the lease is signed (RICS Code, Appendix B5), so you know the future rent from day one.
• Turnover rent. The rent is linked to the tenant’s turnover at the property, in retail or leisure premises (RICS Code, Appendix B5).

How much could the rent change? A worked example

The lease sets the review basis: open market rent, an index such as RPI or CPI, or a fixed increase, and an upward-only review never lets the rent fall (RICS Code, Appendix B5). The example below shows how much that choice matters.

Worked example: illustrative figures, not real index data. Current rent £20,000 a year, five-yearly review. Over the five years the index has risen 18% and the open market rent for the premises has fallen to £19,000.

The same lease can produce very different rents depending on one clause. If inflation had been low instead, the collar would have set the rent above what the index produced.

Are upward-only rent reviews still allowed?

For now, yes. The English Devolution and Community Empowerment Act 2026 will stop new business leases using reviews that can only go up, but that part of the Act starts on a date the government sets by regulations, and none had been set by 30 October 2026. A lease you sign before then can keep an upward-only review for its whole term. One point already matters for leases signed now: if the lease gives you an option to renew, agreed on or after 17 March 2026, the renewal will be caught when the ban starts, even though the option was agreed before then.

Our separate guide to the upward-only rent review ban explains what the Act does and what to ask for in a lease you sign now.

When do reviews happen, and what if a date is missed?

• Review dates: the RICS Code (Appendix B5) says reviews under leases of ten years or more are usually at five-year intervals, and under shorter leases may be more frequent, such as every three years or annually. Check they suit the length of the lease and any break dates. A review just after a break date, or close to the end of the term, changes the economics of staying.
• Who can start it: some clauses let only the landlord trigger a review. The RICS Code (Part 3, para 4.4)says leases should allow either party to start the rent review process and should not impose time limits intended to prevent a review or set a new rent through inaction.
• Missed deadlines: courts presume that time is not of the essence in a rent review timetable unless the lease shows otherwise (Lancecrest v Asiwaju [2005] EWCA Civ 117, applying United Scientific Holdings v Burnley BC), so a late step doesn’t usually lose the review. The lease can say otherwise, for example where the review is linked to a break clause, so check the wording.
• Back rent: if a review is settled late, check what the lease says about the rent for the period between the review date and the settlement, as you could owe a lump sum. Budget for it.
• Disputes: the lease should say who decides if you can’t agree. The RICS Code (Appendix B5) says a tenant should make sure that, if the parties cannot agree the open market rent, either party can refer it to an independent expert or arbitrator.

What to check before you sign

• The review basis, and whether the rent can go down as well as up.
• For index-linked reviews: which index, which dates, and any cap or collar.
• For open market reviews: the assumptions and disregards, especially on rent-free periods and the term.
• Review dates against your break dates.
• Who can start a review, and how disputes are decided.

Rent review wording is technical, and small changes move a lot of money over a long lease. Have the lease checked by a solicitor before you sign: we introduce you to an independent SRA-regulated solicitor who can review it.