Upward-Only Rent Reviews: What the 2026 Act Really Changes, and When

The ban on upward-only rent reviews received Royal Assent on 29 April 2026, and much of the commentary since has suggested the practice is already over. It is not: the provisions are on the statute book but not in force, and that distinction governs almost every commercial lease being negotiated today.

What Parliament has done

The measure sits in the English Devolution and Community Empowerment Act 2026, an Act whose name is more often got wrong than right. The 2026 Act inserts a new section 54A and a new Schedule 7 into the Landlord and Tenant Act 1954, and it is there that the ban will live.

Royal Assent was given on 29 April 2026, but the rent review provisions were not brought into force by the Act itself. They commence on such day as the Secretary of State appoints by regulations, and no such regulations have been made. The Government has said it will consult on caps and collars first, and the 2026 Act allows exceptions to be created by regulations, so the final shape of the regime is unsettled. Anyone offering you a start date is guessing.

What an upward-only rent review is

A commercial lease usually provides for the rent to be reviewed periodically, commonly every five years, by reference to something external: the open market rent for comparable premises, an index such as RPI or CPI, or a proportion of turnover. An upward-only clause adds one instruction to that machinery, namely that the reviewed rent is the higher of the passing rent and whatever the review produces. If the market has fallen, the rent does not follow it down. It has been the standard position in England and Wales for decades, and it is why a lease signed at the top of a market can comfortably outlive the market that produced it.

What the upward-only rent review ban does once it commences

Where a lease provides that the reviewed rent is the higher of the passing rent and a reference amount, the upward-only element will be of no effect. The rent becomes the reference amount itself, whether open market rent, an index or turnover, and it can therefore fall as well as rise.

Two further changes matter as much. Where only the landlord may trigger a review, the tenant will be able to trigger it too, which is what makes a downward movement real rather than theoretical, since no landlord calls a review in a falling market. And a requirement in a superior lease that an underlease contain an upward-only review will itself be ineffective. The 2026 Act contains broad anti-avoidance provisions and cannot be contracted out of.

A good deal remains permitted. Fixed or stepped increases agreed at the outset are unaffected, since both parties know the bargain when they sign. Index-linked reviews survive provided the rent can move down as well as up, as do turnover rents that move both ways, and so does the simplest answer of all, a shorter lease with no review in it.

Who is caught by the upward-only rent review ban, and who is not

The ban will apply to business tenancies in England and Wales, meaning tenancies to which Part 2 of the Landlord and Tenant Act 1954 applies. It reaches leases contracted out of security of tenure, and superior leases whether or not the superior tenant is in occupation. It is not confined to retail, whatever the high street framing of the original announcement suggested.

It will apply to leases granted after commencement and to renewal leases granted under the 1954 Act after commencement. It will not apply to leases already in existence: a lease completed before commencement keeps its upward-only review for the whole of its term, however long that term runs. Nor will it apply to a lease granted under an agreement for lease exchanged before commencement, which includes reversionary leases.

One element reaches backwards, and it is the part most often missed. Where a lease is granted under a tenancy renewal arrangement, meaning an option to renew or an agreement for lease with a sitting tenant, and that arrangement was entered into on or after 17 March 2026, the resulting lease is caught whatever its own date. An option granted this spring may therefore produce a lease, years from now, in which the upward-only wording does not work.

What the ban means for commercial landlords now

The first point is leverage. Every month before commencement is a month in which an upward-only review can still be granted and will still bind for the whole term.

The second is drafting. Fixed and stepped rents are about to become considerably more attractive, because they survive the ban and give certainty. Expect starting rents to rise as landlords price in the loss of downward protection, and expect shorter terms with break rights where a landlord would rather revisit the rent than be tied to an index that can fall.

The third is options to renew, since any option granted on or after 17 March 2026 carries the ban into the lease it produces. The fourth is that other people are already asking: lenders and valuers have begun raising the point in due diligence and in valuation assumptions, and a portfolio whose income depends on upward-only reviews may meet the question well before the legislation arrives.

What the ban means for business tenants now

The most important thing a tenant can know is that a lease signed today almost certainly does not benefit from it. The provisions are not in force, and a tenant who accepts an upward-only review this month will be bound by it for the whole term, unrescued by commencement whenever it comes.

That makes this a matter for negotiation rather than for waiting. Tenants holding options to renew are in a better position: if the option was entered into on or after 17 March 2026, the lease it produces will be caught, which is worth establishing before the option is exercised.

Common questions

My lease was signed in 2024. Does the ban apply to it?

No. Existing leases are untouched, and the review in it will operate for the whole of the term.

We are about to exercise an option to renew. Will the new lease be caught?

That turns on when the option was entered into, not when it is exercised. Arrangements entered into on or after 17 March 2026 are caught, and earlier ones are not.

Can a landlord still use RPI or CPI reviews?

Yes, provided the clause allows the rent to move down as well as up. An index-linked review that only ratchets upwards will be caught like any other.

When will the ban actually start?

Nobody knows. Commencement requires regulations that have not been made, and a consultation is expected first.

A change already doing its work

England and Wales are not the first down this road: Ireland banned upward-only reviews in new commercial leases from 28 February 2010 under section 132 of the Land and Conveyancing Law Reform Act 2009. Scotland is unaffected by the 2026 Act. It is unusual for a statutory provision to influence behaviour this much before it is in force, but the bargaining has already shifted, starting rents are already being adjusted, and options granted since 17 March 2026 already carry a consequence that will not become visible for years. The law has not changed yet. The market has.

The law is stated as at 4 September 2026. This article is general information and not legal advice, and the position on any particular lease depends on its own terms.

About the author: Dr Aamir Nawaz, LLB (Hons), LLM, PhD, Solicitor, Barrister (np) and Notary Public.