Upwards-only rent reviews: what the new statutory ban means for commercial leases
A major shift is on the horizon for commercial property. The long‑anticipated ban on upwards‑only rent reviews (UORRs) has now been enacted as part of the English Devolution and Community Empowerment Act 2026 (the 2026 Act), signalling a fundamental change in how rents may be reviewed across England and Wales.
For decades, UORRs have been a defining feature of the commercial leasing market. Although the ban is not yet in force, its impact is expected to be far‑reaching. Landlords and tenants alike should now be considering how their leasing strategies, negotiations and long‑term property arrangements may need to adapt in response.
When will the ban take effect?
Although the 2026 Act is now law, the ban on UORRs has not yet commenced. The commencement date will be set by regulations and is expected to be sometime in 2027. Until then, existing market practice remains unchanged.
What rent review provisions will be prohibited?
Once in force, the ban will render unenforceable any variable rent review mechanism that prevents rent from falling below a minimum level. This includes:
- Upwards-only open market rent reviews
- Upwards-only index‑linked rent reviews
- Upwards-only turnover‑linked rent reviews
In other words, any rent review clause that includes a “floor” preventing downward movement in rent will be caught by the legislation.
What rent structures will remain permissible?
The 2026 Act does not prohibit all rent review mechanisms. The following structures are expected to remain enforceable:
- Fixed or stepped rents
- Genuine upwards and downwards open market rent reviews
- Upwards and downwards index‑linked reviews
- Upwards and downwards turnover‑linked reviews
This preserves flexibility for the parties but removes the ability to require rent to increase only, regardless of market conditions.
Which leases will the ban apply to?
The ban will apply to:
All new commercial leases granted after the commencement date including lease renewals and reversionary leases. This is the case whether or not the lease is contracted out of the Landlord and Tenant Act 1954 and regardless of whether the business tenant is in occupation.
Importantly, the legislation also captures certain “tenancy renewal arrangements” entered into on or after 17 March 2026. These are arrangements under which a landlord or tenant can require the grant of a future tenancy, and are likely to include:
- Contractual options to renew
- Put and call options
- Agreements for lease with existing tenants
- Lease extension rights
The precise scope of this definition is not yet fully clear and is expected to be tested through future judicial interpretation.
Impact on superior landlords and subleases
The ban will also affect superior landlords. Any requirement for subleases or underleases to include an upwards-only rent review will become ineffective, and superior landlords will lose the ability to insist on UORRs in those arrangements.
Are there any exceptions?
Leases granted after the commencement of the ban pursuant to contracts entered into before the commencement date (such as agreements for lease) will generally fall outside the prohibition.
Areas of ongoing uncertainty
The legislation leaves some important questions unanswered, including whether the following will be permitted:
- Caps and collars within rent review mechanisms
- Clauses allowing the higher of two different upwards/downwards review methodologies
These points may need to be clarified by future regulations or court decisions.
New statutory trigger rights for tenants
The 2026 Act also introduces a statutory right allowing a tenant to trigger a rent review, even where the lease provides that only the landlord may do so. This is intended to ensure that tenants are able to benefit from falling market rents where a lease includes an upwards and downwards review mechanism.
Wider market implications
The unenforceability of upwards-only rent reviews is likely to have broader commercial consequences. For landlords, the change may affect rental income assumptions and, in some cases, debt servicing models based on fixed or rising income streams. For tenants, the reform provides greater alignment between rent levels and prevailing market conditions.
Looking ahead, the ban is expected to influence how leases are structured and negotiated. Landlords may increasingly favour higher initial rents or stepped rent profiles to mitigate risk, while tenants may seek additional incentives or alternative concessions in return. Over time, this may lead to a rebalancing of risk allocation within commercial letting arrangements.
Next steps
Both landlords and tenants should now consider:
- Reviewing their existing portfolios and future leasing plans
- Assessing the impact of the ban on new leases and upcoming renewals
- Considering whether any tenancy renewal arrangements entered into since 17 March 2026 may be caught
- Thinking strategically about acceptable rent structures in future negotiations
Early review and proactive planning will be key to navigating the transition once the ban comes into force.
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