Upwards-only rent review ban: what landlords and tenants should be doing now

The upwards-only rent review ban isn’t in force yet, and won’t be until secondary legislation switches it on, likely in 2027. It would be easy to file this under “deal with it later” but that would be a mistake.

The English Devolution and Community Empowerment Act 2026, which received Royal Assent on 29 April 2026, already has teeth. A retrospective element catches certain lease renewal arrangements entered into from 17 March 2026 onwards, meaning decisions being made on leases today could already be affected. There’s a practical case for acting now rather than waiting for the ban to formally take effect, and that applies to landlords protecting rental income just as much as tenants hoping for more flexibility.

Here’s what we’d suggest looking at, but first, a quick recap of what’s actually changing.

What is an upwards-only rent review?

An upwards-only rent review is a mechanism found in most commercial leases whereby, at each review point, rent is set at whichever is higher: the current market rent, or the rent already being paid. In practice, that means rent can go up on review, or stay the same, but it can never go down, even if market rents have fallen well below the passing rent. It’s been the standard approach across almost every commercial sector for decades, and it’s the exact mechanism the new ban targets.

For landlords

Check anything with a renewal option or agreement for lease dated on or after 17 March 2026

If a tenancy renewal arrangement, whether that’s a formal option, a put or call option, or an agreement for a future lease, was entered into on or after this date, the eventual renewal lease may be caught by the ban even though it hasn’t come into force yet. Go through live transactions and recent completions now to identify anything that falls into this category.

Review your rent review drafting across the portfolio

Where leases rely on an upwards-only mechanism, work out which of them might eventually need restructuring, and start thinking now about what an upwards-and-downwards alternative would look like for each asset.

Consider stepped rent arrangements for new lettings

Fixed rental increases agreed at the outset aren’t affected by the ban, because the rent at each stage is already known rather than being reviewed to an unknown sum. This is one of the more straightforward ways to build in some certainty while the wider rules are still settling.

Think about re-gearing existing leases before the ban takes effect

For leases with an upwards-only review that you want to preserve for longer, there may be value in agreeing a re-gear with your tenant now, while the current structure is still permitted.

Revisit your rent review provisions for sub-lettings

Any requirement in an existing lease that a sublease must include an upwards-only review will become unenforceable once the ban is in force. If your investment strategy relies on that requirement, it’s worth understanding the exposure now.

Talk to your lender

Rental certainty underpins a lot of secured lending. If facilities have been structured around upwards-only income, raise this with your lender or asset manager sooner rather than later so any covenant or valuation implications aren’t a surprise.

For tenants

Check whether any renewal arrangement you’ve entered into falls after 17 March 2026

If you’ve agreed an option to renew or a similar arrangement on or after this date, the renewal lease itself may already be caught by the ban, which could work in your favour on rent.

Hold off locking into new upwards-only terms where you have room to negotiate

If you’re currently negotiating a new lease or renewal, it’s worth raising whether the landlord would agree to upwards-and-downwards terms ahead of the ban, particularly if the term will run past the point the ban is expected to come into force.

Understand what you might be offered instead

Landlords looking to protect income may propose stepped rents, higher initial rents, or shorter lease terms with fewer or no reviews. None of these are necessarily bad options, but they need to be weighed properly against a straightforward upwards-and-downwards review, rather than accepted as the only alternative on the table.

Keep an eye on the caps and collars question

The Government is expected to consult separately on whether caps and collars i.e. mechanisms that limit how far a reviewed rent can move in either direction, will be permitted. This could shape what a typical negotiated position looks like once the regime beds in, so it’s worth watching for tenants weighing up medium-term lease commitments.

Get advice before agreeing to any rent review restructuring

If a landlord raises restructuring an existing lease ahead of the ban, take advice before agreeing. It may be a fair trade-off, but it should be assessed on its own terms rather than under time pressure.

The bigger picture

None of this is just drafting detail. Rental certainty sits underneath property valuations, investment decisions and secured lending, so a change to how rent reviews work has knock-on effects across the whole commercial property market. The ban also arrived without the sector consultation a change of this scale would normally involve, which has left some uncertainty around exactly how the detail, particularly caps and collars, will be settled.

What is clear is that the window between now and full implementation matters. Decisions on leases, options and renewal arrangements taken today can already fall within scope of the ban, so both landlords and tenants are better placed acting on this now than waiting for the rules to formally change.

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Helen Marsh is a Partner in our Commercial Property team. She has over 20 years’ experience in commercial property and has earned a reputation for her expertise in landlord and tenant work in the hospitality, retail, office and warehouse sectors, acting for known brands with 200+ stores to entrepreneurs taking on their first site.

If you’re looking to understand more about your legal position, contact one of our expert commercial property solicitors today on 0330 111 3131 or via our online enquiry form.