Upwards-Only Rent Review Ban: What Landlords and Tenants Should Check in Commercial Leases

11 June 2026

5 min read

Practical guidance for new leases, renewals and Heads of Terms.

If you are negotiating a new commercial lease, lease renewal or Heads of Terms, the proposed ban on upwards-only rent review clauses is now an important drafting point. Although the relevant provisions are not yet in force, landlords and tenants in London should treat rent review wording, renewal arrangements and lease options as live legal issues when agreeing terms.

Below is a clear, practical overview of what is happening, why it matters, and where the key risks sit for commercial leases being negotiated now.

1) What is an “upwards-only rent review”?

An upwards-only rent review is a clause that allows rent to increase, or stay the same, on review, but not decrease, even if market rents have fallen. Historically, it has been a standard feature in many commercial leases, especially where rent is reviewed by open market valuation or by indexation.

2) What has changed in 2026?

The English Devolution and Community Empowerment Act 2026 received Royal Assent on 29 April 2026 and contains provisions that prohibit upwards-only rent review mechanisms in many new and renewal business tenancies in England and Wales.

3) Has the law already changed for leases being granted today?

Not yet. Although the Act has Royal Assent, the relevant rent review provisions are not currently in force. They require commencement via secondary legislation, and commentary anticipates implementation later, with market expectation that it will not be before 2027.

Practical point: this is still a “now” issue because Heads of Terms agreed today often shape renewals and options later, and the legislation includes provisions that can affect renewal arrangements entered into from March 2026. If you are agreeing Heads of Terms, a new lease or renewal terms now, rent review drafting should be treated as an active negotiation point rather than standard boilerplate.

4) Which rent review clauses are most likely to be caught?

The prohibition targets clauses where:

The reviewed rent is not fully fixed or ascertainable at the start; and
The mechanism only permits increases, or guarantees a minimum uplift.

That can capture traditional open-market, index-linked and turnover-linked mechanisms where they are drafted to be upwards-only.

5) What about renewals and options already being negotiated?

Commentary highlights a limited but potentially significant retrospective element relating to renewal arrangements, particularly where renewal options or arrangements are entered into on or after 17 March 2026 and drafted broadly to prevent avoidance.

Practical point: if you are agreeing Heads of Terms, renewal mechanics or lease options now, both landlords and tenants should treat rent review drafting as a live legal risk item rather than boilerplate.

6) Why does this matter for London deals specifically?

In London, where occupiers, investors and landlords are often balancing cost, flexibility and asset value, rent review wording can materially affect the long-term commercial position under a lease. For that reason, the issue is not just the headline rent: it is also how review clauses, renewal rights and option drafting are handled at Heads of Terms stage and in the lease itself.

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FAQs

Has the ban already started?

The Act has Royal Assent, but the rent review provisions are not yet in force and will require commencement regulations. Implementation is expected later.

Does it affect existing leases already in place?

The regime is not retrospective for existing leases generally, but there are important points around renewals, options and certain drafting impacts that should be reviewed in context.

Does this affect commercial lease renewals and renewal options?

Potentially, yes. While the new regime is not generally retrospective for existing leases, renewal arrangements and options entered into from March 2026 may need careful review depending on how they are drafted and when they are exercised.

What should I do at Heads of Terms stage?

Do not treat rent review clauses as boilerplate. Agree the intended mechanism early and ensure renewal and option drafting is checked with the new regime in mind.

Should rent review wording be agreed at Heads of Terms stage?

Yes. Landlords and tenants should avoid leaving rent review drafting to the lease stage alone. Heads of Terms should make clear what review mechanism is intended and whether renewal rights or options may be affected.

Author Bio

An Le Tran is a Professional Support Lawyer in the Commercial Property team at Grant Saw Solicitors. She qualified as a solicitor in 2005 and has been part of Grant Saw since 2007, bringing close to two decades of experience in property law to her role. An Le focuses on driving best practice, efficiency and innovation across the team's work, supporting the delivery of practical, commercially grounded advice to landlords, tenants, investors and developers across London.

Commercial lease and renewal advice

Our Commercial Property team advises landlords, tenants, investors and owner-occupiers across London on new leases, lease renewals, Heads of Terms and rent review drafting.

If you are negotiating terms now, we can help you assess the practical impact on your proposed lease or renewal.

Call 020 8858 6971 or email commercial@grantsaw.co.uk to discuss your circumstances.
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Disclaimer

This article is for general information only and is not legal advice. Laws and guidance change and outcomes depend on facts. If you need advice on your situation, please contact us. Grant Saw Solicitors LLP is authorised and regulated by the Solicitors Regulation Authority.

Last updated: 6 May 2026