Onwards and upwards?

The English Devolution and Community Empowerment Bill (the bill) received royal assent on 29 April 2026. Its ban on upwards-only rent reviews (UORRs) is one of the most anticipated changes to the UK commercial leasing market in recent years.

Part of its Plan for Change, the government says banning UORRs will help revitalise struggling high streets by keeping rent affordable for businesses.

Who does this apply to?

• all new commercial leases that fall within Part II of the Landlord and Tenant Act (LTA) 1954.
• statutory and agreed renewals arising from leases granted on or after 17 March 2026.
• headleases and other non-occupational lease structures.

What’s changing?

• Review mechanisms where the higher rent is not known at the time of granting the lease are banned.
• All tenants can grant subleases that comply with the act, even if pre-existing UORR clauses in superior lease obligations prevented it.
• A tenant can trigger rent reviews even where the lease only permits the landlord to do the same.
• Landlords cannot require the tenant to take out a new lease at a new rent.
• Mechanisms that allow for both upwards and downwards review remain enforceable.

When is it happening?

Although the impact assessment anticipated implementation in 2027-28, the act’s swift progress through parliament saw it become law on 29 April 2026.

However, secondary legislation is needed to bring specific provisions of the act into force, and so the timing of the enactments to the LTA 1954 is not yet known.

Reactions

One of the main criticisms of the UORR ban is a lack of prior industry consultation.

Landlords and investors fear the ban may cause income volatility that could reduce asset valuation, increase borrowing costs and tighten lending controls.

Tenants and retail groups have welcomed the ban as it will give tenants greater protection during economic downturns and increase fairness by strengthening their negotiating power.

How can I prepare?

• Landlords must evaluate the ban’s impact on current and future negotiations and consider how rent will be determined.
• Asset management strategies will need to consider the potential for rent decreases at review.
• Tenants should reassess how their leverage will change in response to the ban and consider a wait-and-see approach regarding new leases.
• Tenants should also ensure that renewed lease drafts reflect the forthcoming statutory position.
• Landlords and tenants will both need to obtain specialist legal advice to ensure lease terms remain commercially viable but also fully compliant with the act.

 Why read on?

The impact of a UORR ban is expected to be wide-reaching and complex. Bella offers extended analysis for property lawyers, where she considers the bill’s effect on high streets, and the wider commercial leasing market. She also examines how the behaviour of both tenants and landlords is likely to shift, including new strategies landlords may use to increase their financial security and negotiating leverage.

This is a shortened version of a full-length article previously featured in Property in Practice magazine. To read the full article, log in or register, using the links below.