The End of Upward-Only Rent Reviews: What Landlords Need to Know

The English Devolution and Community Empowerment Act 2026 marks one of the most significant shifts in the commercial leasing landscape for decades. Among its most impactful provisions is the statutory ban on upward-only rent review clauses in commercial leases - a mechanism that has long underpinned landlord income and investment strategy.

While the detail continues to evolve ahead of implementation (expected no earlier than 2027), landlords should now be actively reviewing their approach to leasing in light of the changes.

A Fundamental Change to Rent Review Structures

Traditionally, upward-only rent review (UORR) clauses ensured that rent at review could either increase or remain static, even in a declining market. These provisions have been a core feature of commercial leases, supporting valuation models and providing income certainty for landlords. 

Under the Act, such clauses will be rendered unenforceable in new and certain renewal business tenancies. Where a rent review mechanism does not fix the rent at the outset and would otherwise operate upwards only, it will instead be converted into a two-way review - allowing rent to move both up and down. 

This change is expected to capture common review mechanisms such as open market, index-linked and turnover rents where they previously incorporated an upward-only assumption. 

Timing and Transitional Considerations

Although the Act received Royal Assent on 29 April 2026, the relevant provisions are not yet in force. Current market expectation is that implementation will follow secondary legislation, likely during 2027. 

Importantly for landlords, the legislation includes a limited retrospective element. Renewal arrangements entered into on or after 17 March 2026 may already fall within scope, meaning that leases granted pursuant to those arrangements cannot include upward-only review provisions once the regime is in force. 

Existing leases, however, will generally remain unaffected, preserving current income streams under already completed transactions. 

Impact on Investment and Valuation

The removal of upward-only reviews is likely to have a material impact on investment strategy and asset valuation. Historically, landlords have relied on guaranteed or minimum rent uplifts to support financing and underpin property values. 

With rents now capable of decreasing at review, landlords may face increased income volatility. As a result, there is already a shift in market behaviour, with some landlords considering higher initial rents, shorter lease terms, or alternative rent structures such as stepped rents (which remain permissible where fixed at the outset). 

Restrictions on Structuring and Anti-Avoidance

The Act also includes anti-avoidance provisions to prevent landlords from replicating the effect of upward-only reviews through alternative mechanisms. For example, side agreements designed to top up rent if it falls at review are unlikely to be effective. 

In addition, landlords will no longer be able to retain exclusive control over triggering rent reviews. Tenants will be permitted to initiate the review process, which may increase the likelihood of downward adjustments in weaker markets. 

The Act further impacts sub-letting arrangements. Clauses in superior leases requiring subleases to include upward-only rent reviews will be overridden, reducing landlords’ ability to ensure consistency across lease structures. 

Scope of the Ban

The ban applies broadly to business tenancies in England and Wales, including leases that would fall within the Landlord and Tenant Act 1954 regime, whether or not they are contracted out. 

Certain arrangements remain outside scope, including residential leases and licences, and stepped or fixed rent increases agreed at the outset. 

Preparing for the New Regime

For landlords, the key takeaway is clear: the traditional assumption of ever-increasing rents can no longer be relied upon in new commercial leases. The shift towards two-way rent reviews introduces a more market-responsive framework, but with it comes increased uncertainty.

Landlords should therefore:

• Review pipeline transactions, particularly those involving renewal options post-March 2026
• Reassess valuation assumptions and funding models
• Consider alternative rent structures that provide greater certainty
• Monitor forthcoming guidance, particularly on issues such as caps and collars

The ban represents not just a technical drafting change, but a fundamental recalibration of the landlord-tenant dynamic. Early engagement with the implications will be key to maintaining value and managing risk in a changing market.