The Upward-Only Rent Review Ban: What Commercial Landlords Need to Know

For as long as anyone in commercial property can remember, rent has only ever moved one way at a review. It could go up, or it could stay put, but it was never going to come down, however far the market fell around it. That is about to change, and while the change itself is probably a year or two away, there is a date back in March that already affects deals being signed this month.

The law behind it is the English Devolution and Community Empowerment Act 2026, which became law on 29 April. Tucked inside a Bill about local government devolution is a ban on upward-only rent reviews in new business leases across England and Wales. The Government still has to switch it on, and most people expect that in 2027, possibly 2028.

Why 17 March 2026 matters right now

A late amendment pulled part of the ban forward, so it already applies to any deal signed on or after 17 March 2026 that promises your tenant a further lease down the line. That is drawn more widely than most people realise, taking in options for the tenant to take a new lease at the end of the term, options for you to require them to take one, and agreements to grant a lease to a tenant who is already in the building.

In practical terms, if you grant a lease this week with a renewal option in it, the rent at the start of that second lease and every review during it will almost certainly be caught, and any upward-only wording you have put in will not hold.

There is still some argument among practitioners about renewal leases granted after 17 March but before the ban formally starts, and until that gets sorted out the sensible course is to assume it applies and build your numbers accordingly.

What actually changes

The ban works by rewriting parts of the Landlord and Tenant Act 1954, the legislation that governs business leases, and once it is live there are three changes that affect you directly.

• Rent can fall as well as rise. Wherever a review is tied to the open market, to inflation, or to a share of your tenant’s sales, and the figure is not already fixed when the lease is granted, the rent can come down.

• Your tenant can trigger the review. Most leases hand that right to the landlord alone, which is why reviews have a habit of happening when rents have gone up. Tenants will have the same right.

• Subleases become your tenant’s business rather than yours. If your lease requires any sublease to carry an upward-only review, that requirement simply stops applying, and the terms get settled between your tenant and theirs.

  
  

It applies to business leases throughout England and Wales, and it makes no difference whether your tenant has the automatic right to renew or signed that right away at the outset, or whether they are actually trading from the building. There is a short list of exceptions, mostly agricultural and mining tenancies, but they will not touch the vast majority of commercial portfolios.

What you can still do

None of this stops rent going up, and it does not mean every new lease has to carry a rent that can drop. You have still got a few routes open, and the sooner you get comfortable with them the better placed you will be when the start date lands.

• Fixed increases. Rent that rises by a set amount or percentage on set dates, all agreed at the point the lease is signed. Predictable for you and predictable for your tenant, which tends to help the conversation along.

• Inflation-linked reviews. Rent that tracks an index such as CPI. The catch is that it has to work genuinely both ways, so it can fall if the index does.

• Shorter terms. Nothing stops you letting for five years rather than fifteen and resetting the rent when the space comes back to you.

  
  

Which of these makes sense comes down to the building, the tenant and how the asset is funded, and none of them is a straight replacement for what you have been used to.

The effect on your numbers

This is the part that tends to catch people out, because the change works its way through valuations and lending long before the first review comes round.

• Valuations. A rent with a floor under it supports a higher figure than one without, so any valuation resting on that assumption is going to need another look.

• Borrowing. Lenders have priced commercial property on that same assumption for decades, so it is worth running your loan-to-value and interest cover against a scenario where rent drops at review, particularly on anything carrying a lot of debt.

• Income forecasts. If your models assume rents hold at review, they will need rebuilding with rents falling instead, and on a heavily borrowed asset the gap between the two is considerable.

• Timing a sale. Leases granted before the ban starts keep their upward-only reviews, so for a while there will be two kinds of lease circulating and the older ones may well prove the more saleable.

  
  

When it all starts

There is no start date yet and nobody in the market is expecting one before 2027. Ahead of that, the Government is expected to consult on whether caps and collars, the limits that stop rent moving too far in either direction, ought to survive in some modified form. If they do, they will probably become the practical replacement for the upward-only review, so that consultation is one to keep an eye on.

Anything you have already granted is untouched and your existing upward-only reviews stand, and the same goes for a lease granted under an agreement you exchanged before the ban begins. What will change is the temperature of the conversation, because tenants are going to become a great deal more aware of all this, and you can expect it to come up whenever a lease is up for renegotiation.

Your checklist

1. Go through your standard lease. Track down every upward-only assumption in it, and do not stop at the rent review clause, because some of them sit in the subletting provisions.

2. Pull out every deal signed on or after 17 March 2026 that promises a further lease. Tenant options, landlord options, agreements with sitting tenants. Each one needs advice on how the rent will be set.

3. Look hard at anything still live. If there is a renewal right in it, you want a decision now on how rent will work on renewal, rather than a conversation about it after exchange.

4. Re-run the figures with rent falling at review. Start with whichever assets are carrying the most debt.

5. Think about whether a re-gear before the start date suits both sides. Leases granted before the ban keep their upward-only reviews, so there may well be a deal in it for you and the tenant.

   
   

Lease wording decides money in more places than the rent review clause, and break clauses are the obvious other one. They fail on technicalities far more often than either side expects, and we have set out how they work in our article on break clauses in commercial leases.

The Law Commission is also running a separate review of how commercial lease renewals work, with its current consultation closing on 16 September 2026 and further changes proposed.

Speak to our commercial property team

This is the biggest shift in commercial rent review in decades and it arrived, oddly enough, inside a Bill about local government. A fair chunk of the market still has not worked through what it means.

Our commercial property and development team acts for landlords, investors and developers across Manchester and the North West, and whether you are granting a single lease or looking across an entire portfolio, we can tell you where you stand and what needs changing.

Where a lease forms part of a bigger transaction, we work alongside our corporate and commercial and property finance teams so nothing slips between the two.