The end of upwards-only rent reviews: what landlords and tenants need to know

For decades, upwards-only rent review clauses have been a defining feature of commercial leases in England and Wales. They ensure that when rent is reviewed at agreed intervals during a lease term, it can only stay the same or increase, never fall.

For landlords and investors, these clauses have provided income certainty and underpinned property valuations. For tenants, they have meant being locked into paying above-market rents during downturns.

That position is now set to change. On 29 April 2026, the English Devolution and Community Empowerment Act 2026 received Royal Assent. Tucked within its provisions is a statutory ban on upwards-only rent review clauses in new and renewal commercial leases.

The ban is not yet in force, and market expectation is that this will not happen before 2027, and possibly 2028. A late amendment introduced during the Bill’s passage through the House of Lords means that renewal options contained in leases entered into on or after 17 March 2026 are already caught. This retrospective element has significant implications for transactions being negotiated right now.

Once in force, the ban will apply to all business tenancies in England and Wales, whether contracted out of the Landlord and Tenant Act 1954 or not. It will capture open market, index-linked and turnover-linked rent reviews if they contain an upwards-only element. Stepped or fixed rents, where the amount payable is known at the outset, will remain unaffected.

The Government has also suggested it will consult on the use of collars, which could permit limited floors and ceilings on rent movements, but no details have yet been published.

For landlords and investors, the practical consequences are real. Valuations and funding models that rely on a guaranteed minimum income stream will need to be revisited. The market is already adapting, with some landlords seeking higher day-one rents, preferring shorter lease terms with break options, or moving towards stepped rent structures to maintain income certainty.

For tenants, the change is broadly positive. Rents will be able to adjust downwards to reflect falling markets, and tenants will also gain a new statutory right to trigger rent reviews themselves, rather than relying on the landlord to initiate the process.

Whether you are a landlord reviewing your portfolio strategy, an investor reassessing income projections, or a tenant negotiating a new lease, this is a fundamental shift in the commercial leasing landscape, and the time to take stock is now.