This clause describes how your rent will change over time, usually annually or at lease renewal. It matters because rent review clauses directly affect your costs and financial planning; in the UK, the law implies that rent reviews must be "reasonable" and cannot be completely one-sided, though the parties can agree to almost any formula. Common mechanisms include fixed increases (e.g., 3% per year), inflation-linked increases (tied to the Retail Price Index), or market-rate reviews (where a surveyor sets the new rent). A poorly drafted clause can lock you into unexpected costs or give the landlord unfair power to raise rent.
Prefer fixed percentage increases (e.g., 2–3% annually) over market-rate reviews, because they are predictable and easier to budget for. If the clause ties rent to inflation, specify which index (e.g., "UK Retail Price Index") and set a cap—for example, "rent increases by RPI but no more than 5% per year." Avoid clauses that let the landlord unilaterally decide the new rent; instead, require an independent surveyor if you disagree. For long leases, negotiate a rent review freeze for the first 3–5 years to give you stability.
Frequently Asked Questions
What does this clause mean in simple terms?
This clause describes how your rent will change over time, usually annually or at lease renewal.
Why should I care about this clause?
It matters because rent review clauses directly affect your costs and financial planning; in the UK, the law implies that rent reviews must be "reasonable" and cannot be completely one-sided, though the parties can agree to almost any formula.
What are my options?
Common mechanisms include fixed increases (e.g., 3% per year), inflation-linked increases (tied to the Retail Price Index), or market-rate reviews (where a surveyor sets the new rent).
How does this affect small businesses?
A poorly drafted clause can lock you into unexpected costs or give the landlord unfair power to raise rent.