Latest on the ban on upwards-only rent reviews (UORR)

The English Devolution and Community Empowerment Act 2026 

The English Devolution and Community Empowerment Act 2026 (the Act) received Royal Assent on 29 April 2026. You might be wondering what an Act named after English Devolution and Community Empowerment has to do with rent reviews. However, contained within Schedule 37 of the Act is the ban on upwards only rent reviews.  

Issues to note 

Having reviewed the Act (published in full on 11 May 2026), we highlight the following key takeaways. 

1. The effect of the Act is to vary any upwards only rent review in a new commercial lease into one that can operate both upwards and downwards. 

2. The ban is expected to impact the following types of rent review mechanisms commonly found in commercial leases: 

• open market 

• index linked 

• turnover. 

3. The ban will not apply to residential leases or genuine licences to occupy commercial premises. 

4. Provisions contained in existing headleases that require new sub-leases to contain upward only rent reviews will also be overridden by the ban. So it appears that head-landlords (and indeed the head-tenant, who is the landlord of the sub-lease) can no longer insist on parity between the rent review provisions in different levels of lease. 

Effective date 

We are still awaiting an implementation date for the ban and details of any saving or transitional provisions. However, we do know that the ban will apply to all new commercial leases of properties “occupied for the purposes of a business”, not just those with security of tenure under the Landlord and Tenant Act 1954.    

A retrospective element was unexpectedly introduced in the Act. So, for leases granted after 17^th March 2026, that contain options to renew (whether by the landlord or tenant), then those renewal leases cannot contain upwards only provisions. On the other hand, it appears that parties entering into a reversionary lease, i.e. a lease granted now which does not commence until a future date, will not be caught by the ban, provided the lease is completed before the Act comes into force. This may seem a strange anomaly, but it appears to be the intention of the drafting. On the other hand, whether a tenant would want to agree to such an arrangement now, and in effect contract out of the benefit of the Act early, remains to be seen. 

Anti-avoidance provisions 

Perhaps mindful of lessons from the 2010 Irish ban on upwards only rent reviews, the Act also contains anti-avoidance provisions so that: 

1. parties cannot “contract out” of the ban 

2. where a rent review can only be triggered by the landlord, there will be an implied right for the tenant to trigger the review too – which would be helpful to tenants in a falling market 

3. the ban also applies to “side agreements” or documents ancillary to the main lease. 

Further considerations 

Whilst the Act has received Royal Assent, further consultation is due to take place to address: 

1. the effect of “caps” and “collars” on index-linked rent reviews 

2. how the use of the “higher of” mechanisms in rent review clauses (such as comparing results from both open market and RPI/CPI reviews) might operate.  There has been a suggestion that it will still be possible to have the rent increase where one review (e.g. open market) results in a lower figure, but the other one leads to an increase. The logic is that, as both review types are ‘permissible’ (in the sense that the amount can go up or down), then it will be open to the landlord to select the one which produces a more favourable overall result 

3. continued use of an index figure “plus X %” on the assumption that an index can both rise and fall. It is possible this will be in the discussions with the Government about cap and collar arrangements. 

We anticipate: 

1. the emergence of a “two-tier” market with landlords able to implement upwards only rent reviews under pre-ban leases and potentially different valuations being applied by lenders 

2. increased use of fixed or stepped rent increases, and higher opening rents as a ‘hedge’ against lower rental growth during the life of the lease 

3. the exercise of break options as a means of effecting a ‘re-gear’ of the lease to try and obtain more favourable terms 

4. more contested valuations of properties, if there is now a commercial gain from a tenant arguing that a property is over-rented. 

As highlighted above, tenants of pre-ban headleases containing upward only rent reviews will not be able to impose upward only rent review provisions in any future sub-leases, potentially leading to a revenue gap. 

What action might we suggest that clients take now? 

Given the breadth of the anti-avoidance drafting, we anticipate there will be limited scope to circumvent the Act. If you are currently negotiating a lease or heads of terms for a lease, which will contain a rent review mechanism, you should take appropriate advice to ensure that the provisions will comply with the Act. You should consult with your professional team to look at alternative rent structures, such as fixed increases or index-linked rents, as alternative methods of managing the potential downside risks of a wholly upwards/downwards open market rent review mechanism.