Upwards-only rent review clauses are commonly found in commercial leases across England and Wales. In effect these clauses provide that, at agreed intervals during the term of a lease, the payable rent can increase or remain the same but cannot decrease, even if open market rental values have declined.
However, with the English Devolution and Community Empowerment Bill receiving Royal Assent on 29 April 2026, significant changes to this long-standing commercial precedent are on the horizon. Although this is not yet in force, understanding the potential impact of these changes is essential. In this article, we will be discussing:
- What Will Change?
- What Will Be Affected?
- Next Steps
- How We Can Help
What Will Change?
The English Devolution and Community Empowerment Bill currently contains various provisions which will affect rent reviews in commercial leases.
- Banning Upwards-Only Rent Reviews
One of the most prevalent changes in the Bill is the prohibition of upwards-only rent reviews. This means that any clauses in a lease allowing for an upwards-only rent review will be ineffective and the revised rent determined by them will not be payable. Instead, the payable rent will be determined as if there was no upwards-only rent review clause.
- Tenant Powers
The Bill also permits the tenant certain powers to enable the rent review process to operate effectively. Tenants will have the ability to initiate rent reviews irrespective of whether the terms of the lease directly grant them this power. This also extends to give the tenant the right to initiate any other ‘operational actions’ necessary for the rent review.
- Sub-Tenancies
The ban of upwards-only rent reviews would also cover sub-tenancies. If a superior lease requires any sublease granted under it to contain an upwards-only rent review this will also not have any effect. The revised rent determined with the upwards-only rent review clause in the sublease will be disapplied.
What Will Be Affected?
The ban on upwards-only rent reviews will apply to all commercial leases granted once the ban comes into force. Commercial leases containing such clauses but granted prior to this date will not be affected.
However, it is important to note that whilst the ban will not be directly retrospective, if a lease has been granted after 17 March 2026, any renewal lease granted under it will be subject to the ban. As such, some leases which currently lawfully incorporate an upwards-only rent review clause and state that renewal leases are to be granted on the same terms, will be affected. The renewal lease will not be able to have same terms as it will be caught by the ban and any rent reviews in the renewal lease must not be upwards-only.
Next Steps
The ban on upwards-only rent reviews is not expected to come into force until at least 2027. However, once the changes under the English Devolution and Community Empowerment Bill come into force, it will be important that landlords and tenants understand how they are affected. We would recommend:
- Review of current leases, rent review clauses and renewal options: As above, the changes do have a retrospective element and therefore it is important to understand the terms of current leases and how they may be affected.
- New leases to be granted: Heads of Terms for new leases should take into account the effect of these changes and set out clear provisions for rent reviews in light of them.
- Seek professional advice: If you are concerned about how these changes may impact you it is advisable to engage legal support early.
How Dunn & Baker Solicitors Can Help You
If you would like to discuss the impact these changes may have on your property interests, please contact our Commercial Property team for a free initial consultation.
Call us on:
Exeter 01392 285000
Cullompton 01884 38818
Or via our contact form: https://www.dunnandbaker.co.uk/contact/