What goes up can now come down: the end of upwards only rent reviews

Upwards only rent reviews have been a common feature of commercial leases for generations.  

In short, they provide that, when rent is reviewed, it can either stay the same or it can go up. As the name suggests, rent can never be reduced. This protects landlords (and, consequently, investors) against dips in the market over the lifetime of a lease.

However, section 36 of the English Devolution and Community Empowerment Act 2026 (“the Act”) will limit a landlord’s ability to include upwards only rent reviews in commercial leases. Specifically, it prevents upwards only rent reviews where the future rent is unascertainable. It is common practice for upwards only rent reviews to be index-linked or based on market value, so any departure from this long-established practice is likely to have a significant impact on rental yields. 

Landlords have been waiting to see whether the ban would ultimately make it into the Act. On 29 April 2026, they received their answer; the Act received Royal Assent, including the provisions prohibiting upwards only rent reviews.

Which leases are going to be caught?

The Act will affect all leases which could be said to be “business tenancies” for the purposes of the Landlord and Tenant Act 1954. However, importantly, the statutory criteria in the 1954 Act do not have to be satisfied; it is sufficient that they are capable of being satisfied. So, for instance, a commercial tenant who has sublet premises could still benefit from the Act.

The Act also prohibits sub-letting provisions in headleases which provide for upwards only rent reviews in its sublease. Any such provisions will be automatically void.

When will the ban take effect?

Although the Act has now received Royal Assent, its provisions are not yet in force. The government suggests that implementation will not be before 2027 (and may be as late as 2028).

Leases granted before the Act comes into force will not be subject to the ban. However, landlords do need to be aware of an important exception to this rule.

What about agreements to renew?

A late amendment to the Act provides that any agreement for a renewal lease, entered into on or after 17 March 2026, will be caught by the Act. This is the only provision of the Act which will have retrospective effect, meaning landlords therefore need to be alive to this when negotiating new agreements for renewal leases.

Points to consider

If they want to include upwards only rent reviews in new leases, landlords and their agents will need to keep a careful eye on timings to ensure that leases are completed before the ban comes into force.

Any agreements for renewal leases currently being negotiated that provide for upwards only rent reviews are likely to require renegotiation, as the ban will render those provisions void.

Landlords should also be aware that the Act may still change. The government is consulting on the use of “caps and collars” in rent review mechanisms, which would prevent rents from falling or rising beyond certain thresholds.

Whether the Act will have its intended effect remains to be seen. Landlords will look for alternative ways to protect their investments, which could include:

• insisting on “permitted” upwards only rent reviews (i.e., reviews where rent increases are fixed in advance)
• granting shorter, contracted-out leases to give them increased flexibility;
• insisting on an inflated initial rent; and/or
• carrying out more frequent, voluntary re-gearing.

In short, the Act represents a clear shift in approach to upwards only rent reviews for commercial leases in England. While its impact will not be immediate, landlords will need to think carefully about timing, renewal negotiations, and future lease drafting as the new regime develops.