Income Strips And The English Devolution And Community Empowerment Bill

The government have, without much fanfare, published the English Devolution and Community Empowerment Bill. What is not to like about devolution and community empowerment you may reasonably ask? Well, innocuous as it may sound, it will have a destabilising impact on the property market as it seeks to abolish upwards only rent review and collars on indexed reviews. Rent reviews that can be worked out in advance (meaning fixed increases) are unaffected although very few leases have that option.

The income strip market

For the purposes of the currently-booming income strip and commercial ground rents market, the concern here is not about market rent review (which will have a potentially major impact the commercial property market) but the proposal to abolish collars on rent reviews. As those in the market are aware, the current market position is for there to be an annual indexed review, increasingly to a CPI measure, with a cap and collar on the level of uplift