Business rates
The November 2025 budget announced a potentially significant rebalancing of the business rates system, coming into force in April 2026. There will be a new, lower multiplier for smaller retail, hospitality and leisure premises, balanced by a higher multiplier for business premises with a rateable value of £500,000 or more.
However, a nationwide revaluation of business premises will also take effect in April 2026, based on values as they stood at April 2024. Many businesses will see significant increases in their rateable values, and therefore a sharp increase in their rates bills, despite the headline-grabbing lower multipliers. Business ratepayers should be prepared to lodge valuation appeals in spring 2026, as bills based on the new rateable values begin to arrive.
Upwards-only rent reviews to be banned
The English Devolution and Community Empowerment Bill includes a ban on upwards-only rent review clauses in commercial leases. The ban is likely to come into force in late 2026, but will not affect existing leases entered into before the new law comes into force (commencement). Nor will it apply to leases entered into after commencement pursuant to pre-commencement agreements for lease.
If an existing (pre-commencement) lease is renewed in the future, then the ban will apply to the renewal lease. For more information, please see our article here.
Landlords' insurance commissions – going to appeal
A High Court decision in 2025 cast doubt on whether commercial landlords can charge tenants for the commission element of an insurance premium. There was no issue over the commission payable to the landlord's broker, but could the tenant be forced to pay a separate commission that would go into the landlord's own pocket? No, said the High Court.
The landlord is taking the dispute to the Court of Appeal and the hearing will take place in June 2026. Depending on the outcome, there could be scope for many business tenants to claim refunds going back several years. Each case will depend on the wording used in the lease. Please see our article on this controversial issue here.
Potentially tougher energy efficient measures?
There has been a further delay in the Government announcing plans to toughen the minimum energy efficiency standards for commercial properties. Despite the continuing delay, we do expect the minimum energy grade to increase from the current grade E at some stage.
A consultation some years ago proposed a minimum grade C by 2027 and grade B by 2030, but it is likely these timescales will slip. Some energy efficiency duties may also be imposed on tenants, instead of the legal burden falling entirely on landlords as at present. This means tenants may come under pressure to accept lease covenants to use their premises in a more energy-efficient way.
Landlord and Tenant Act 1954 consultation
The initial consultation in 2025 concluded with a recommendation to keep this Act on the statute book. The 1954 Act gives business tenants a statutory right to renew their lease, unless the lease is contracted out of the Act's protection. The option to contract out will be retained.
However, 2026 is likely to see a follow-up consultation on streamlining the process to make it less time-consuming, especially for tenants of shorter leases. See our client bulletin for more details.