For decades, upward-only rent reviews have been a cornerstone of commercial leases, offering landlords certainty and investors predictable income. That may now be about to change.
A largely unexpected provision in the English Devolution and Community Empowerment Act (2026) introduces a ban on upward-only rent review clauses in England and Wales. The final details of how this will work are yet to be seen but given that implementation may be as soon as the end of 2026 (though 2027/8 appears more likely) landlords, investors, tenants and funders should be considering their options now.
What does the ban on upward-only rent reviews mean in practice?
In simple terms, rent will no longer be guaranteed to rise, and reviews could move up or down depending on market conditions.
The changes are expected to apply to:
- New leases and renewals
- Leases granted pursuant to Options to Renew dated post 17 March 2026
- Most types of rent review mechanisms (including open market, turnover and index-linked reviews)
The changes will not affect fixed increase or stepped rents.
Why this change is significant for Landlords, Tenants and Investors
This is much more than a technical tweak.
For Landlords:
- Loss of predictable income growth
- Potential impact on valuations and financing
- Increased pressure to rethink lease structures
For Tenants:
- Greater protection against rising rents
- But possibly higher initial rents or fewer incentives
At this stage, several important details remain unclear, including:
- Whether rents stated to be the higher of indexed linked or open market rent will be permitted, though sources suggest that the government may allow this.
- How rent caps (limits on maxim rents) and collars (limits on minimum rents) will be dealt with. On the face of the legislation as drafted, caps and collars are prohibited, but again sources suggest that these may be allowed in certain circumstances.
What's next?
The legislation is aimed at supporting high streets and occupiers. But in reality, we may see shorter leases, greater reliance on index-linked or fixed uplifts and a slower transaction time as parties wait for clarity.
If you’re involved in commercial property, now is the time to review your leases and manage your risks ahead of implementation. Please don’t hesitate to contact me or a member of the commercial property team for advice.