Upwards-only rent review clauses have been a common feature of commercial leases, allowing landlords to increase rent while preventing it from falling if market values decrease.
However, proposed changes to the law are set to ban upwards-only rent reviews in certain new and renewed commercial leases.
But what will the ban mean in practice?
You might be asking:
- Will upwards only rent reviews be banned?
- Will the changes affect my existing commercial lease?
- How will commercial rent reviews work once the ban is introduced?
- What should I consider when renewing or negotiating a lease?
In this article, Commercial Property Expert, Charlie Stickland, answers these questions and explains what the proposed ban on upwards-only rent reviews could mean for commercial landlords and tenants.
What is a rent review clause in a Commercial Lease?
A rent review clause allows the rent payable under a commercial lease to be reviewed and increased to reflect market values at that time. The clause sets out how and when the landlord can review the rent.
Typically, commercial rent review clauses are “upwards-only”. This means the rent cannot fall below the amount the tenant was paying before the rent review date even if the market suggests that it should decrease.
Will upwards only rent reviews be banned and when will this come into force?
Yes. The ban on upwards-only rent reviews is expected to come into force in 2027 or 2028.
The English Devolution and Community Empowerment Act 2026 received Royal Assent on 29 April 2026. This bill confirms that there will be a ban on Upwards-Only rent reviews in commercial leases; however, this is not expected to take effect until 2027 or 2028.
There may be variations, exceptions or transitional arrangements, but we do not know what these might be.
You can also read the government’s guidance on the ban on upwards-only rent reviews here.
Have questions about how the proposed ban could affect your commercial lease? Get in touch with our experts on 01202 499255 for advice without legal jargon.
What is the proposed ban on upwards only rent reviews in the UK?
The ban on upwards-only rent reviews means that commercial rent reviews must be capable of going down as well as up. A landlord will no longer be able to guarantee that the rent will remain the same or increase following a review.
The upwards only rent review ban will apply where the rent increases are not fixed in advance, and the review mechanism guarantees an increased rent.
Who will the rent review changes affect?
The rent review changes will affect commercial landlords and tenants entering into a new lease or putting a renewal lease in place after the ban comes into force.
These changes will apply:
- Whether or not a new or renewal lease has security of tenure under the Landlord and Tenant Act 1954; if a “renewal arrangement” was entered into on or after 17 March 2026.
A “renewal arrangement” is likely to include agreements for lease, simple letter renewals and a few other forms of legal agreement.
When negotiating a new or renewed commercial lease, the proposed rent and rent review mechanism should be addressed in the heads of terms before the lease is drafted.
How will rent reviews work without upwards only clauses?
Tenants will be able to trigger rent reviews. This means landlords will not be able to avoid a rent review where the market rent may have decreased.
A tenant may trigger the rent review by appointing a valuer or surveyor. The tenant must then notify the landlord in writing within seven days of that appointment that they are triggering the rent review.
If you are preparing to negotiate or renew a commercial lease, get in touch with our experts on 01202 499255. We can help you understand your options and review the proposed terms.
How will rent reviews be treated in a sub-lease where a superior lease requires an upward-only rent review?
Once the bill comes into force, the terms of the superior lease will be automatically modified.
The parties to the sub-lease may then agree rent review terms which comply with the bill.
How will reversionary leases be treated?
A reversionary lease is a lease that takes effect at a future date, immediately after the current lease expires.
There is uncertainty around how reversionary leases will be treated where the lease is agreed before the ban comes into force but takes effect afterwards. It is unclear whether this agreement will be treated as a renewal or as a continuation of the existing lease.
The position is likely to depend on whether these agreements are regarded as “renewal arrangements” and how they are initially treated by the courts. However, there is no further guidance on this at this stage.
How will the ban on upwards only rent reviews affect commercial landlords?
Commercial landlords entering into new or renewal leases after the ban comes into force will no longer be able to rely on rent review provisions that guarantee the same or higher rent.
Rent reviews will need to allow the rent to decrease where the market values have fallen. Tenants will also be able to trigger the rent review, preventing landlords from avoiding a review where the rent may go down.
How will the ban on upwards only rent reviews affect commercial tenants?
Commercial tenants entering into new or renewal leases after the ban comes into force may benefit where market rents have decreased.
Tenants will be able to trigger a rent review by appointing a valuer or surveyor and notifying the landlord in writing within seven days of the appointment.
Existing commercial leases entered into before the ban comes into force will not be affected.
Landlords preparing to grant a new lease should consider the rent review mechanism alongside the other key terms of a commercial property lease.
Whether you are a commercial landlord or tenant, our team can advise you on rent reviews, lease negotiations and renewals. Get in touch with our experts on 01202 499255.
What alternatives are there to upwards only rent reviews?
The bill does not rule out the use of agreed upper or lower limits or stepped rents. It may therefore be possible that these mechanisms can be used.
The position may be clarified in further legislation when the ban comes into force.
Side agreements requiring the tenant to compensate the landlord for rent decreases are prohibited.
When will the upwards only rent review ban come into force?
The ban on upwards-only rent reviews is expected to come into force in 2027 or 2028. An exact commencement date has not yet been confirmed.
How will existing commercial leases be treated?
Commercial leases already in place before the bill comes into force will not be affected.
However, the bill will apply to a renewal lease entered into after the ban comes into force, even where the renewed lease is on the same or similar terms as the previous lease.
What are the key take aways
Upwards only rent reviews will be banned when the new bill comes into force in 2027 or 2028 but we await further legislation to hopefully provide some alternative mechanisms for commercial landlords and tenants.
Specialist commercial lease solicitors
After reading this article, you may still have questions about how the proposed changes could affect your commercial lease.
Whether you are a landlord or tenant, our experienced commercial property solicitors can advise you on rent review clauses, lease renewals and the terms of a new commercial lease.
If you are looking to renew your lease or would like to discuss your circumstances, you can get in touch with one of our experts on 01202 499255 or by filling out the form. We offer all new clients a free initial chat.
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