‘Upwards-only’ rent review ban: impact on healthcare operators

The English Devolution and Community Empowerment Act 2026 received Royal Assent on 29 April 2026, marking one of the most significant changes to commercial leasing law in England and Wales in decades.

Among its provisions is a statutory ban on upwards-only rent review clauses in commercial leases. These clauses let a landlord raise your rent at review but never lower it, whatever the wider market is doing.

The ban is not yet in force. The government will first consult on the detail, including whether caps and collars (maximum and minimum limits on rent movement) will be permitted. Commencement is anticipated in 2027 or 2028.

Once commenced, any variable rent review provision in a new or renewed business lease will be unenforceable. Rents will instead be set by whatever method the lease specifies and may go up or down.

For healthcare businesses — dental and veterinary practices, GP surgeries, pharmacies and allied health providers — the change matters more than most. This article explains why and what to do now.

Why healthcare businesses are particularly exposed

Most commercial tenants can, in theory, relocate if their lease terms become unaffordable. For healthcare businesses, the position is fundamentally different.

Healthcare practices — whether dental, veterinary or medical — are built around patient and client footfall tied to a specific location. Patients register with you because you’re local and your referrals, reputation and goodwill are anchored to your premises.

Relocating a practice is not simply a matter of finding new space; it means notifying patients, potentially losing registrations, updating regulatory bodies and rebuilding relationships — all at significant cost and with no guarantee that your patient base will follow you.

This makes your relationship with your premises uniquely important. Unlike a retailer who might move to a neighbouring unit or a different high street, a healthcare occupier is often effectively locked in, handing landlords real leverage in negotiations.

The consequence is that rent levels and lease terms are disproportionately material to the viability of healthcare businesses. An upwards-only review that locks you into above-market rent during a downturn is not merely an inconvenience — it can directly threaten the sustainability of your practice, particularly for smaller operators with thin margins.

NHS dental contracts and property: a unique vulnerability

For NHS dental practices, the position is even more acute. NHS dental contracts are linked to the practice’s registered address and premises. The contract entitles you to deliver Units of Dental Activity (UDAs) from a specific location only and any move requires NHS England approval, which isn’t guaranteed.

This creates a situation in which the dental practice owner is, in practical terms, unable to use the threat of relocation as a negotiating lever with a landlord. The landlord knows that you’re tied to the premises by your NHS contract and that moving would put your contract and your income at risk, weakening your bargaining position at rent review and on renewal.

Similar issues affect veterinary practices (where client relationships and CMA registration are premises-specific), pharmacies (where NHS contracts are also premises-linked) and GP practices (which need commissioner support to relocate).

From April 2026, NHS dental reforms also require contractors to allocate 8.2% of contract value to urgent and unscheduled care, further tightening the link between contract and premises.

Impact of the ban: opportunities and transitional complexity

The positive side

For healthcare occupiers entering into new leases after the ban takes effect, the change is good news. Rents will be able to move up or down at review to reflect the market, so if local rental values fall, your rent can fall too.

Tenants will also gain a new right to trigger rent reviews where the lease currently gives that right to the landlord only. This is particularly useful where a landlord is reluctant to review in a falling market.

The transitional challenge

The real difficulty is for leases signed now, during the transitional period before the ban commences.

An upwards-only clause in a lease signed today will remain valid for the full term, as the ban isn’t retrospective for existing leases. By the time your first rent review arrives, however, the ban will almost certainly be in force and your lease may look out of step with the market.

Industry commentary suggests pre-ban leases may be seen as ‘overly onerous’ once review evidence comes from post-ban leases. That could complicate reviews and affect the assignability of your lease if you later sell the practice. A buyer may demand a discount or walk away altogether. For practices with high fit-out costs and location-specific goodwill, this is a material risk.

Subletting

Many healthcare leases require any sublease to mirror the headlease rent review, including the upwards-only element. Once the ban commences, any such requirement in the headlease will have no effect.

This creates a mismatch where your headlease rent can only rise but a sublease rent could fall. If you sublet rooms to an associate, you could end up paying more to your landlord than you receive from your subtenant.

Renewal options — the retrospective element

The Act has one retrospective element. Any ‘tenancy renewal arrangement’ entered into on or after 17 March 2026 — including contractual renewal and put and call options — will be caught by the ban when the renewal lease is granted.

The upwards-only element of the renewal review will be unenforceable, and the initial renewal rent could be capped by the review formula, even if it’s below the passing rent. This is an immediate issue for practices negotiating leases with renewal rights now.

Practical advice for healthcare occupiers

If you’re negotiating, renewing or assigning a lease, consider the following steps:

1. Push for an open market rent review (up and down): with the ban already on the statute book, ask for a review that allows the rent to move in both directions, in line with the incoming regime
2. If the landlord resists, propose a cap and collar: this limits how far the rent can move at each review (for example, no more than 10% up or down) and may become a standard market compromise once the government finishes its consultation
3. Negotiate a tenant break clause around the review date: this gives you an exit if the new rent is unaffordable. Make sure the break conditions are realistic and achievable
4. Scrutinise renewal options: any contractual renewal option entered into on or after 17 March 2026 will be caught by the ban, so draft the renewal review on an open market basis from the outset
5. Address subletting now: if your lease requires subleases to mirror the headlease review, seek an amendment disapplying the upwards-only requirement for any sublease granted after the ban commences
6. Consider a shorter term: a three- to five-year lease reduces the risk of being locked into an upwards-only review for a long period. Landlords may agree in exchange for certainty on the initial rent
7. Take specialist advice: get an independent surveyor’s view of the current market rent before agreeing review terms and take specialist legal advice on the lease as a whole.

Conclusion

The ban on upwards-only rent reviews marks a significant shift in commercial leasing. For healthcare businesses tied to a specific location, the stakes are higher than for most occupiers. Because they can’t easily move, unfavourable lease terms can have a disproportionate impact on viability.

The good news is that the law is moving in tenants’ favour. Once in force, rents will reflect the real market, both up and down. The challenge is the transition, as leases signed now will keep their original terms for the duration.

Healthcare occupiers shouldn’t assume ‘business as usual’ drafting is acceptable. Whether you’re taking a new lease, renewing an existing one or selling a practice, specialist real estate advice is essential.