Government proposals to reform the Retail Prices Index (RPI) could influence rent reviews in England and Wales. The proposal which will not take effect until 2030 seeks to align RPI with Consumer Prices Index including housing costs (CPIH) in the hope that it will result in more accurate data and calculation.
Where leases rely on RPI-linked rent reviews, a shift to a CPIH-linked calculation instead could impact upon long term rentals.
Don’t wait 5 years to find out your rent is not going to be as expected!
Act now: review your leasehold estates and valuation models for any RPI-linked rent reviews which, if converted to CPIH, is anticipated to negatively impact upon your outgoings as a tenant or dent your expected income as a landlord.
It is essential to understand the impact such a change may have on rent adjustments and to strategically plan in today’s ever-changing landscape. When negotiating a new deal, ensure this is at the forefront of your rent review discussions so that any rent review is agreed with necessary adjustments and futureproofing in mind.
Freeths can help with negotiations and wording for heads of terms, variations to existing leases and re-gears of rents and rent reviews. For more information contact Selina Norris
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The content of this page is a summary of the law in force at the date of publication and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.
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