Commercial Real Estate

Nickhil Mandora, Alex King
May 2026

On 29 April 2026, the English Devolution and Community Empowerment Act 2026 (the Act) received Royal Assent.

The Act includes a controversial ban on upwards-only rent reviews (UORR) in all business tenancy leases in England and Wales, with the aim to protect high street tenants and encourage economic growth.

The ban on UORR is not currently in force and requires secondary legislation to take effect, which is expected in 2027.

Key takeaways

  • Landlords will be prevented from including upwards-only rent reviews in commercial leases, where the reviewed rent cannot be ascertained when the lease is granted.
  • It will apply to all “business tenancies” whether or not the lease is contracted out of the Landlord and Tenant Act 1954.
  • The ban will apply to all new leases granted after the relevant section of the Act comes into force, unless the lease was entered into pursuant to an agreement which completed before the ban took effect.
  • Lease renewals for existing tenancies entered into after the ban comes into force will also be caught if:
  • there was no agreement for lease prior to the ban coming into force; or
  • the renewal lease is granted pursuant to a “renewal arrangement” made on or after 17 March 2026:

This will capture renewal leases where, for example, either the landlord or tenant has exercised a right in the original lease or contained in a separate agreement which requires the other party to grant or take a new lease.

  • Clauses in existing leases which require a sub-lease to include an UORR will be void.
  • Whilst the rent review process is currently predominantly led by landlords, tenants will also have a right to initiate rent reviews once the legislation is enacted.
  • Leases renewed under Part 2 of the Landlord and Tenant Act 1954 are also caught by the new provisions.
  • Parties will not be able to contract out of the ban.

What does this mean in practice?

Given the likelihood of landlords wanting to protect investment returns, the Act may result in higher initial rents and shorter lease terms.

Alternative rent review mechanisms which we may start to see include:

  • Index linked rent reviews:

An index linked rent review adjusts rents based on inflation indices like CPI or RPI. Opting for an index linked rent review mechanism which allows the revised rent to go up or down presents a prudent option for both parties, keeping rent in line with inflation.

However, given the current economic climate and inflationary trends it appears unlikely that tenants are going to experience falling rents any time soon. Index linked rents also reinforce the importance of effective cap and collar provisions, to mitigate economic volatility. The Government has only recently stated their intention to consult on caps and collars, so we await the outcome of these discussions.

  • Stepped rents:

Stepped rents or fixed uplifts will not be impacted by the ban (as the level of rent is known at the start of the term) and present another viable alternative to landlords seeking to protect their investments.

An increased use of stepped or fixed rents is likely to have significant commercial consequences, including increased landlord pressure for shorter leases and additional break rights.

The ban on UORR represents a significant shift in the commercial property market.

If you would like to discuss how the ban may impact your business or future transactions, please get in touch.