4th June 2026 ❘

Upwards Only Rent Reviews: What the New Rules Mean for Commercial Leases

Commercial lease rent review changes affecting landlords and tenants in England

By Helen Hayward, Head of Commercial Property.

Following the Government’s surprise proposal to ban upwards‑only rent reviews last year, the picture is now a little clearer. With the English Devolution and Community Empowerment Act 2026 now in place, attention is turning from the initial reaction to the practical question: what does this change actually mean for leases, landlords and tenants?

The End of Upwards Only Rent Reviews: What Has Changed?

The proposed ban on upwards‑only rent reviews is no longer just an interesting policy idea – it is a real shift that the market needs to prepare for.

When Will the Upwards Only Rent Review Ban Take Effect?

Although the legislation received Royal Assent in April 2026, it is not expected to come into force until further regulations are introduced, likely sometime in 2027.  Further consultation to take place regarding the use of agreed “caps” and “collars” will be awaited with interest.

Existing leases will not be affected, but there is a limited anti-avoidance measure which means that renewals agreed on or after 17 March 2026, but completed after the ban takes effect, may still fall within the new rules.

How Will Commercial Lease Rent Review Clauses Change?

The direction of travel is clear:

  • traditional upwards‑only wording will no longer be effective
  • rent review clauses based on market value, indexation or turnover will need to operate on a genuine two‑way basis
  • “dual‑reference” formulas (for example, the rent being specified as “the higher of” indexation and market rent) are expected to remain valid, provided they allow for the rent to fall below the passing rent.These are likely to become more popular (the reference to index linking is unlikely to result in rent decreases)
  • Stepped rents and other fixed uplifts – where the rent is known from the outset – are expected to remain unaffected, and are already coming back into sharper focus as a result

Preparing for the Future of Commercial Lease Negotiations

For landlords, the change introduces a degree of uncertainty that has not traditionally been part of commercial leasing:

  • income could move down as well as up
  • valuation assumptions may need to be revisited

For tenants, the position is more balanced:

  • rents can better reflect market conditions
  • the risk of being tied to above‑market rent over time is reduced

This is not a wholesale rewrite of the system, but it is a change which will change the shape of how commercial leases are negotiated and documented for the foreseeable future.

Need Advice on Commercial Leases or Rent Review Clauses?

For further advice you can speak with one of our Commercial Property Solicitors – please just get in touch.