Rent Review | London | RICS | Commercial Property

Rent Review in London

A rent review in London is a common practice in the commercial property market, allowing landlords and tenants to negotiate the rent for a commercial property on a regular basis. These reviews can take place at set intervals, such as every three or five years, or they can be triggered by specific events, such as the expiration of a lease or a tenant's request for a rent reduction.

One of the key factors determining the outcome of a commercial rent review is the condition of the property market. In a strong market, landlords may be able to negotiate higher rents, while in a weaker market, tenants may be able to negotiate lower rents or other concessions. Factors such as location, property condition, and the strength of the tenant's business can also play a role in the negotiations.

In London, commercial rent reviews are often conducted by independent Chartered Surveyors, who will assess the property and the local market conditions to determine a fair rent. Both landlords and tenants can hire their own Chartered Surveyors to represent them in the process, and the two surveyors will work together to come to an agreement on the rent.

It is important for both landlords and tenants to prepare well in advance for a commercial rent review. Landlords should have a clear understanding of the condition and value of the property, as well as the current state of the local market. Tenants should have the financial information and other relevant data about their business to present to the landlord. Both parties should also be aware of their rights and obligations under the lease and be prepared to negotiate in good faith.

In London, commercial rent reviews can be a complex and time-consuming process, but with proper preparation and representation, both landlords and tenants can come to a mutually beneficial agreement.

Commercial Rent Reviews London, Harding Chartered Surveyors

Rent Review | London | Quotation

For any Rent Review Quotations enquiries, please click on “Commercial Services” and the select "Commercial Valuations"

My Landlord Wants to Increase my Rent, what is the Process?

When you review the notice of a rent review, you need to decide what the maximum rental value is that your business can handle and pay.

It is advised that tenants facing a rent review spend some time researching the average tenant commercial rent across local property and opportunities, paying attention to comparable spaces in terms of size and condition, and noting whether the commercial new rent is likely to reflect upgrades made by the landlord during your tenancy.

If you receive the review and are not satisfied or wish to negotiate the new amount as part of the rent reviews lease renewals process, you are entitled to do so. Typically, such rent change disputes and negotiations are based on updates and changes in market activity and will strive to find a middle ground between the landlords and the tenant's market value.

This is where professional assistance can prove vital, as it saves both parties time and ensures that an agreement is reached without too much dispute.

What is a Rent Review?

A rent review assesses the condition of a property as it stands on the market, adjusting the rental agreement in line with the standard of the premises in direct comparison with the rest of the market.

Generally, a rent review is requested either after a set number of years as standard, or if the commercial market rental value in a certain area or specific sector has seen significant activity – for example, if demand means that rental rates are higher than ever. For landlords, a rent review can also be a necessity to help them keep on top of the mortgage and other payments – passing inflation down the line to their own tenants.

It is typically instigated by landlords keen to increase the rent, with commercial rent reviews an effective way of demonstrating how the value of an office or commercial premises has increased over time. Tenants should be aware of the right to a rent review on the part of their landlord when they sign the lease on their commercial tenancy – with landlords required to give notice of a commercial rent review while tenants are free and able to dispute or negotiate as part of the process.

Commercial Rent Reviews London, Harding Chartered Surveyors

Why Use a Rent Review Surveyor?

The main benefit of a rent review surveyor lies in their expertise and their ability to carry the rent review forward without stalemate or inactivity causing further problems. With chartered surveyors able to review market rent across both large and small premises, seeking professional advice can manage the process seamlessly and, crucially, means that there is a designated representative for both the landlord and the tenant in attendance during the review and negotiations.

Long story short, while you may not be sharing a friendly coffee and cookies with a landlord seeking a rental review any time soon, the process should be straightforward and pain-free with the help of a team of chartered surveyors – ensuring that if a fair agreement is not met, the surveyor can manage conflict and dispute resolution.

What is the Process of a Rent Review in London?

When you or your landlord request a rent review, the first thing you need to do is ensure that adequate notice has been given.

As a tenant, a large part of the rent review process is the negotiation. A reputable Chartered Surveyor will present to the landlord, professional advice as to the importance of this notice period, with the industry average falling around three months.

Whether the rent review has been assigned as part of a lease renewal process or is a formality being conducted after a few years of fixed-rate rent, the process then follows one of two patterns.

The landlord will either tap into the Retail Prices Index to assess the value and current rate of commercial rent according to the industry standard across the UK board, or they will be more specific to their local rental market and browse other rent reviews and London lease advisory reports to determine an average rate.

Commercial Rent Reviews London, Harding Chartered Surveyors

Recent Reviews from Harding Chartered Surveyors

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How Harding Chartered Surveyors Can Help with a Rent Review in London?

Rent reviews can often feel like somewhat of a grey area in the commercial landscape, with surveyors brought in to save time and money for both parties.

As part of our service, we aim to ensure that both landlords and tenants are aware of the fine print and details surrounding their rent review – for example, that a reviewed and revised rental amount is viable for back payment to the date of the review itself, which means that the tenant will be liable to backpay any increase in rent no matter how long the dispute lasts for.

If you’re facing a rent review, either as a landlord or as a tenant, then seeking the right advice can mean the difference between a successful next year in business and one filled with challenges and financial upheaval.

Now is the time to ensure that the outgoings across your business are realistic and sustainable, with more advice on our website about receiving and seeking the right advice, as and when you need it. Alternatively, you can reach out to us directly with questions or discuss a specific case with the team, and we can provide you with advice and a quotation.