What goes up can now come down: the end of upwards only rent reviews

In short, they provide that, when rent is reviewed, it can either stay the same or it can go up. As the name suggests, rent can never be reduced. This protects landlords (and, consequently, investors) against dips in the market over the lifetime of a lease. Managers of mixed-use buildings should be aware of these provisions, as they will likely feature in the leases of their commercial spaces. 

However, Schedule 37 of the English Devolution and Community Empowerment Act 2026 (“the Act”) will limit a landlord’s ability to include upwards only rent reviews in commercial leases. Specifically, it prevents upwards only rent reviews where the future rent is unascertainable. It is common practice for upwards only rent reviews to be index linked or based on market value, so any departure from this long-established practice is likely to have a significant impact on rental yields.  

Landlords have been waiting to see whether the ban would ultimately make it into the Act. On 29 April 2026, they received their answer; the Act received Royal Assent, including the provisions prohibiting upwards only rent reviews. 

Whilst the effects of the Act will be felt less strongly in the residential sector, managers of mixed-use buildings should ensure they are up to speed with the changes before entering into new leases (or agreements for lease). 

Which leases are going to be caught? 

The Act will affect all leases which could be said to be “business tenancies” for the purposes of the Landlord and Tenant Act 1954 (which includes retail spaces and offices, which commonly feature in mixed-use premises). However, importantly, the statutory criteria in the 1954 Act do not have to be satisfied; it is sufficient that they are capable of being satisfied. So, for instance, a commercial tenant who has sublet premises could still benefit from the Act, despite not being in possession of the premises. Equally the Act will apply to non-business premises if the permitted use under the lease is for business purposes. 

The Act also prohibits sub-letting provisions in headleases which provide for upwards only rent reviews in its sublease. Any such provisions will be automatically void. 

When will the ban take effect? 

Although the Act has now received Royal Assent, its provisions are not yet in force. The government suggests that implementation will not be before 2027 (and may be as late as 2028). 

Leases granted before the Act comes into force will not be subject to the ban. However, landlords do need to be aware of an important exception to this rule. 

What about agreements to renew? 

A late amendment to the Act provides that any agreement for a renewal lease, entered into on or after 17 March 2026, will be caught by the Act. This is the only provision of the Act which will have retrospective effect, meaning landlords and their agents therefore need to be alive to this when negotiating new agreements for renewal leases. 

Points to consider 

If they want to include upwards only rent reviews in new leases, landlords and their agents will need to keep a careful eye on timings, to ensure that leases are completed before the ban comes into force. 

Any agreements for renewal leases currently being negotiated which provide for upwards only rent reviews are likely to require renegotiation, as the ban will render those provisions void. 

Landlords should also be aware that the Act may still change. The government is consulting on the use of “caps and collars” in rent review mechanisms, which would prevent rents falling or rising beyond certain thresholds. 

Whether the Act will have its intended effect remains to be seen. Landlords will look for alternative ways to protect their investments, which could include: 

• insisting on “permitted” upwards only rent reviews (i.e. reviews where rent increases are fixed in advance)

• granting shorter, contracted-out leases to preserve flexibility; 

• insisting on an inflated initial rent; and/or

• carrying out more frequent, voluntary re-gearing. 

In short, the Act represents a clear shift in approach to upwards only rent reviews for commercial leases in England. While its impact will not be immediate, landlords and managers of mixed-use buildings will need to think carefully about timing, renewal negotiations and future lease drafting as the new regime develops. The Act could even lead to a two-tier market with some leases affected by the changes and others that are not.

It is important that landlords and managing agents take advice when granting new leases (or renewing leases) of commercial units that are located in mixed-use buildings. 

Bill Trow is a specialist Property Litigation senior associate at JMW Solicitors