Start with the lease, not the landlord's figure
Everything turns on the rent review clause. Before you think about the number, read what the lease actually tells the valuer to assume. Most Greater London leases review to open market rent every five years on an upward only basis, which means the rent cannot fall but does not have to rise either. Others are tied to RPI or CPI, sometimes with a cap and collar, and those leave far less room for argument.
Check the timetable carefully. Some leases make time of the essence, so a missed deadline for serving a counter notice can leave you bound by the landlord's figure. If a notice has arrived, note the date and take advice before replying in writing, because a casual email can be treated as agreement or as a formal counter notice.
- The review date and any deadlines for a counter notice
- The basis of review: open market, index linked or fixed uplift
- The hypothetical term length the valuer must assume
- Whether your fit out and improvements are disregarded
- How disputes are resolved: arbitrator or independent expert
Test the comparable evidence
An open market review is won or lost on comparables: recent lettings, renewals and reviews of similar premises nearby. Landlords' surveyors naturally lead with the highest deals. Your job is to show why those deals do not translate directly to your unit.
Greater London rents shift sharply over short distances. A shop on a prime pitch in Richmond or Kingston is not evidence for a secondary parade a few streets away, and an industrial unit beside the North Circular commands a different rate from one deep in an estate with poor lorry access. Headline rents also need adjusting for incentives. A new letting with 9 months rent free on a 5 year term has a net effective rent well below the quoted figure.
- Location, frontage and footfall differences
- Size, since larger units usually achieve a lower rate per sq ft
- Rent free periods and landlord contributions
- Condition, specification and energy rating
- The date of each deal relative to your review date
Look for the points that reduce the rent
Beyond comparables, the lease wording itself often carries discounts. A tightly drawn user clause, restrictions on assignment or subletting, or onerous repairing obligations can each justify a deduction, commonly argued in the region of 2.5% to 10% depending on how restrictive the term is.
Measurement is worth checking too. Floor areas in older leases and agents' particulars are regularly wrong, and retail units should be zoned correctly so that the rear of the shop is valued at a fraction of the front. An error of even 50 sq ft in the front zone can move the rent by thousands of pounds a year. Make sure any improvements you paid for are excluded if the lease says so.
Negotiate first, then use the dispute route if needed
Most reviews settle by negotiation between surveyors, typically over 2 to 6 months. Keep correspondence marked without prejudice until terms are agreed, then record the new rent in a signed memorandum.
If talks stall, either side can usually apply to the RICS for an arbitrator or independent expert to be appointed. The application fee is a few hundred pounds, and the appointee's own fees commonly run from around £3,000 to £10,000 or more depending on complexity, with costs often following the result. A well timed Calderbank offer protects you on costs if the award comes in at or below what you proposed.
Remember that the new rent is backdated to the review date, usually with interest, so set money aside while the review is running. Rent also feeds into Stamp Duty Land Tax calculations and deposit top ups, so the saving from a properly argued review is larger than the headline difference.
Common questions
Can my rent go down at a rent review?
Only if the lease allows it. Most Greater London leases are upward only, so the best outcome is usually a nil increase, but a lease with an upward and downward clause can produce a reduction.
What happens if I ignore the landlord's rent review notice?
It depends on the lease. If time is of the essence and you miss the deadline for a counter notice, you may be fixed with the landlord's proposed rent, so check the clause and take advice straight away.
How much does it cost to challenge a rent review?
Surveyors typically charge a fixed fee, a percentage of the saving achieved, or a mix of both, and it depends on the rent at stake and whether the matter goes to a third party. For most Greater London premises the fee is modest against a saving that repeats every year until the next review.