The Office of the Deputy Prime Minister today released a study commissioned from Prof Neil Crosby of Reading University into the first two years of the voluntarily approach. Crosby concluded the code of practice was having 'very little direct impact on individual lease negotiations'.
Retailers have targeted their fire on upward-only rent review clauses and Crosby was unable to detect any significant change in the market, with the controversial clauses still almost universal.
'There is no evidence that choice is being offered or sought,' the report found. 'Landlords are not actively offering either the threshold review [under which rents can go up or down, provided they do not fall below the level agreed when the lease was signed] or any other alternative.'
However, he laid some of the blame at the tenants' door for not pushing harder for alternative forms of lease. 'The studies also reveal a perception by most tenants and property agents that landlords would be unwilling to agree to an up/down review. Given their belief that rents will not fall, they are generally not prepared to pay extra rent or any other payment for the relaxation of the term,' Crosby said.
The report will increase pressure on the Government to legislate to ban upward-only rent reviews and a decision is expected in advance of the General Election, expected in may this year. BRC director general Kevin Hawkins said: 'It is clear from the report that the property industry does not want legislation, yet they have done nothing to address their leasing practices. The solution was in their hands but they haven't risen to the challenge - now Government intervention is clearly the only option.'