The ban on upward-only rent reviews: what it means for your lease

What an upward-only rent review is

Many business leases allow the rent to be reviewed at set intervals; the RICS Code says reviews under leases of ten years or more are usually at five-year intervals. Traditionally, commercial leases have imposed “upwards only” reviews, which allow the rent to be increased but never decreased (RICS Code, Appendix B5). If the market has fallen, the rent stays where it is.

Say you pay £30,000 a year and, at the review, the market rent for your premises is £27,000. Under an upward-only review you keep paying £30,000. Under a review caught by the ban, the rent would become £27,000.

What the new law does

The English Devolution and Community Empowerment Act 2026 received Royal Assent on 29 April 2026. Section 100and Schedule 37 add new rules on rent reviews to the Landlord and Tenant Act 1954. They cover business leases in England and Wales, including leases contracted out of the 1954 Act’s security of tenure and leases where the tenant isn’t in occupation.

The ban works on the figure the review produces. Where a review sets the rent by reference to the market rent, an index such as RPI or CPI, or the tenant’s turnover, the Act calls that figure the “reference amount”. Any term that would make the new rent higher than the reference amount has no effect, and the rent becomes the reference amount, even if that is lower than the current rent (Schedule 37, Schedule 7A paras 8 and 9).

• Not affected: rents that are known or can be worked out when the lease is granted, such as fixed or stepped increases, and reviews that already go down as well as up (Addleshaw Goddard; Schedule 37 applies only where the new rent is not fixed in advance and could differ from the reference amount).
• Caps and collars: a collar, which guarantees a minimum rise, can make the new rent larger than the reference amount, which the ban makes of no effect unless regulations create an exception (Schedule 37, Schedule 7A paras 9 and 10). The government has committed to consult on allowing collars, possibly with an associated cap (Addleshaw Goddard).
• No side deals: an agreement requiring the tenant to make up the difference in rent is void (Schedule 37, Schedule 7A para 14).
• Tenants can start a review. In a business lease with a rent review granted (or varied to include one) after the start date, or under a tenancy renewal arrangement made on or after 17 March 2026, if the terms do not let the tenant take a step needed to start a review, the tenant may take it and must give the landlord written notice within seven days (Schedule 37, Schedule 7A paras 3 and 4).
• Subleases: once the ban starts, a lease that requires any sublease to have an upward-only review loses that requirement (Schedule 37), and the rent review terms are for the tenant and subtenant to agree.

What isn’t law yet

The ban is not in force. The Act says these provisions start on a day the government sets by regulations (section 108). By 28 October 2026 four sets of commencement regulations had been made under the Act (SI 2026/656, 812, 1127and 1141), and none commences section 100 or Schedule 37. Law firms tracking it (for example K&L Gates) expect a start date in 2027 at the earliest, and some say 2028.

Two other things are still to come:

• A consultation on caps and collars. The government has committed to consult on allowing collars, possibly with associated caps, which could be introduced by secondary legislation (Addleshaw Goddard). The outcome could change what a lease may contain.
• Possible exceptions. The Act lets the government create exceptions by regulations, which both Houses of Parliament must approve.

Which leases it will cover

• Covered: new business leases granted after the start date, and renewal leases granted after it, including renewals under the 1954 Act, whether agreed or ordered by a court (TLT; Schedule 37).
• Not covered: leases granted before the start date. Their rent review terms keep working (Charles Russell Speechlys).
• Not covered either: a lease granted after the start date under an arrangement made before it, such as an agreement for lease (Charles Russell Speechlys). The exception is the renewal arrangements described below.

The ban applies in England and Wales only (Schedule 37, marked E+W).

Why 17 March 2026 matters

A late amendment reaches back to 17 March 2026. It covers “tenancy renewal arrangements”: arrangements under which a tenant can require the landlord to grant a new lease of the premises, or can be required to take one. The obvious example is an option to renew in a lease, but a separate agreement with the existing tenant can count too.

If that arrangement was made on or after 17 March 2026, the ban applies to the starting rent of the renewal lease, where that rent is set by the market, an index or turnover, and to rent reviews during the renewal lease. So a lease signed today can contain an upward-only review for its own term, but if it gives you an option to renew, the renewal will be caught when the ban starts, even though the option was agreed before then.

One law firm has pointed out (Addleshaw Goddard) that the Act is unclear about a renewal lease granted under such an arrangement before the ban starts. If that applies to you, raise it with your solicitor.

If you’re about to sign a lease

A lease you sign before the start date can lawfully include an upward-only review, and existing leases are unaffected (Bevan Brittan). On a ten-year lease with a review at year five, that review would still work upward-only even if the ban had started by then. These are the points to raise with your solicitor before you sign:

• Ask for a review that can go down as well as up. In leases granted after the start date, an upward-only floor will have no effect (Schedule 37).
• Check index-linked reviews for a collar. Collars are among the terms the ban catches, and the government has promised to consult on cap-and-collar reviews, so whether they will be allowed in later leases depends on that consultation (K&L Gates).
• Weigh stepped rents. Stepped or fixed increases are allowed (Addleshaw Goddard), so you know the rent in advance, though it won’t fall either.
• Watch the timing. If you sign an agreement for lease now and the lease itself is granted after the start date, the ban generally does not apply to a lease granted under an arrangement made before it (Charles Russell Speechlys).
• Look at any renewal option. The renewal will be caught when the ban starts if the option was agreed on or after 17 March 2026 (Schedule 37), so the terms for setting the rent need to work in a falling market.
• Think about subletting. If you sublet after the ban starts, your subtenant’s rent may be able to fall while yours can’t, a recognised concern in the market (TLT).

Expect landlords to respond. Charles Russell Speechlys expects higher headline rents, shorter leases, more frequent reviews, greater use of indexation or pre-agreed stepped rents, and fewer tenant incentives such as break clauses or rent-free periods (Charles Russell Speechlys).

If you already have a lease

Your rent review clause is not affected unless the lease is varied after the start date to bring in rent review terms. The new right to trigger a review applies only to leases granted, or varied in that way, after the start date (Schedule 37, Schedule 7A para 3). The change reaches you at renewal: a new lease granted after the start date will be within the ban, including a renewal under the 1954 Act.

Some landlords may propose re-gearing, agreeing new lease terms before the start date. TLT notes that this keeps the current structure in place for longer, so weigh what you are offered in return.