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The English Devolution and Community Empowerment Act 2026 (the 2026 Act) received Royal Assent on 29 April 2026 and includes a ban on upward-only rent reviews (UORRs), profoundly influencing how rent reviews and leases will be structured and negotiated going forward. UORRs have been a prominent mechanism for reviewing the rent during the term of a commercial lease, preventing the rent from falling regardless of market conditions.
The ban is not expected to come into force until sometime in 2027, but it will affect new or renewed commercial leases entered into after the ban. UORRs provisions in leases that are already in existence will not be impacted and will remain enforceable. However, following the ban, if a lease is entered into where a rent review clause includes an upwards-only provision, this element will be ignored.
The ban on UORRs will apply to all business tenancies, regardless of whether the lease is contracted out of the Landlord and Tenant Act 1954. It will apply even where the tenant is not in occupation of the property, has underlet the premises or where the permitted use includes business use, but the tenant is, in practice, using the property for non-business purposes. Landlords will also not be able to hold back reviews in falling market conditions, as the Act will allow tenants to trigger rent reviews.
Although the ban is not immediate, the 2026 Act introduces an immediate impact: certain renewal options granted since 17 March 2026 will also fall within the scope of the ban. It is therefore important that Landlords who are currently negotiating leases that include an option to renew should be aware that any renewal lease granted pursuant to such an option is likely to be caught by the ban on UORRs. This will apply not only to any rent review provisions during the renewal term, but also to the initial rent payable at the start of the renewal lease if the rent is not specified when the option is granted.
As the ban has not yet come into force, existing market practice remains primarily unchanged, but landlords and tenants should consider future leasing plans to prepare for the transition once the ban comes into force.
Ways the market may change:
- Landlords and tenants may agree shorter leases without rent reviews;
- Landlords may favour higher initial rents to compensate;
- Landlords may prefer stepped, fixed rent increases during the term;
- Landlords may opt for inflation-linked reviews as these are less likely to decrease;
- Tenants may seek additional incentives.
Uncertainty remains and further legislation and Government consultation is expected, and we will provide further updates.