Lord Jamieson (Con)

My Lords, I shall speak to the stand-part notices and the amendment in the group in my name and that of my noble friend Lady Scott of Bybrook. Our intention is to oppose Clause 85 and Schedule 34, which seek to abolish long-standing, upward-only commercial rent reviews, standing part of the Bill, while Amendment 254 proposes a review of the market impacts of rent review provisions. I speak with a deep concern for the stability, liquidity and long-term health of the commercial property market and for the businesses, pensions, investors and communities who depend on it. Clause 85 and Schedule 34 would enact an outright ban on upward-only rent reviews in new and renewed commercial leases. This represents one of the most interventionist market reforms in modern commercial leasing, yet it arrives without the benefit of any industry consultation. The British Property Federation has been clear that it does not support the Government’s blanket ban and expresses its concern about the absence of proper consultation. Why are the Government not listening? The existing evidence is clear. Upward-only rent reviews have long underpinned confidence in UK commercial property as an investment asset. These proposed changes have caused widespread concern in the sector. We have heard that upward-only rent reviews provide vital income certainty and support property valuations by ensuring that rental income cannot decline mid-lease—an important factor for institutional investors and particularly lenders assessing long-term risk. Lawrence Stephens, one of the main real estate lawyers, notes that outlawing upward-only rent reviews will undermine the perceived security of rental income and place developers at a disadvantage when seeking finance—a consequence that risks delaying regeneration projects and suppressing new commercial investment. There is a significant concern that the Government’s proposed changes will have a widespread impact on market stability and investment confidence, affecting everything from property values to regeneration projects. Can the Minister please tell us whether the Government have taken this analysis into account and how they plan to mitigate it? The likely effects of these measures on business tenancies that the Government claim to support cannot be ignored. Landlords will inevitably respond to this change by front-loading rents and shortening lease terms to protect themselves against the prospect of downward-only risk exposure. This would most significantly impact the very businesses that the Bill says it aims to help, especially those that require stability over the long term. My opposition to Clause 85 and Schedule 34 standing part of the Bill reflects several key concerns: reduced investment in liquidity, threatening regional development; shorter lease durations with fewer stable long-term tenancies; higher initial rents, counteracting the Government’s aim of supporting the high street; increased financing costs, making commercial development harder to deliver; and a slowing down of regeneration projects across the country, especially in areas dependent on external investment, thereby hampering growth, which the Government say is their number one priority.