For decades, upwards-only rent reviews have been a familiar feature of commercial leases, providing landlords, investors and lenders with greater predictability around rental income and supporting valuations, financing and long-term investment strategies.

That position is set to change.

The English Devolution and Community Empowerment Act 2026 introduces a ban on upwards-only rent review provisions in new and certain renewal business tenancies. Although implementation is expected around 2027, commercial landlords and property investors should begin considering how the reforms could affect future leases and investment decisions.

At Vyman Solicitors, our Commercial Real Estate team advises landlords, investors and developers in Harrow, across London and throughout the UK on commercial leases, property transactions and portfolio matters.

What Is Changing for Upwards-Only Rent Reviews?

Under an upwards-only rent review, rent can increase or remain unchanged at review, but will not ordinarily fall where market rents have declined.

Under the new regime, variable rent review mechanisms will need to allow rents to move both upwards and downwards. The reforms are expected to capture common mechanisms including open-market and index-linked reviews, while fixed or stepped increases agreed at the outset are expected to remain permissible.

The legislation is not generally retrospective, so existing commercial leases containing upwards-only provisions should largely remain unaffected.

However, landlords should pay particular attention to lease renewals, agreements for lease and option arrangements, where the position may depend on timing and structure.

What Does the Rent Review Ban Mean for Commercial Landlords and Investors?

The significance extends beyond commercial lease drafting.

Historically, upwards-only rent reviews have offered landlords some protection against falling market rents. Removing that protection potentially shifts more rental risk towards property owners.

This could affect income forecasting, investment appraisals, commercial property valuations, financing and refinancing. Lenders may also pay closer attention to potential income movements when assessing commercial property finance.

This does not necessarily mean commercial property values will fall. However, tenant quality, asset performance and lease structure may become increasingly important when assessing long-term value.

For landlords and investors with commercial property interests across different locations and sectors, understanding the individual lease, asset and local rental market will therefore remain important.

What Should Commercial Landlords Be Reviewing?

With implementation still ahead, landlords have an opportunity to review their commercial property portfolios before the new regime takes effect.

Particular attention should be given to leases approaching renewal, future acquisitions and developments, and investment assumptions relying upon upwards-only rental growth.

Property owners may also want to consider how individual assets would perform if market rents declined at a future review and whether existing financing assumptions remain appropriate under a more variable rental model.

Shivani Vara, Associate Solicitor at Vyman Solicitors, comments:

“The significance of this reform goes beyond the wording of a rent review clause. For landlords and investors, the important question is how future lease structures could affect the commercial assumptions behind an asset. Reviewing upcoming renewals, acquisitions and development plans early can help property owners understand where the potential exposure lies before the new regime takes effect.”

Preparing for Commercial Lease Reform

There is still time before the reforms are expected to take effect, and further detail and market practice will develop as implementation approaches.

For those acquiring commercial property, refinancing existing assets, negotiating commercial leases or planning developments, understanding how future lease structures may change should form part of the wider legal review of an asset.

Whether you own, invest in or develop commercial property in Harrow, across London or elsewhere in the UK, our Commercial Real Estate team can advise on the legal considerations affecting your portfolio and future transactions.

If you are approaching a lease renewal, acquisition, refinancing or other commercial property transaction, speak to Shivani Vara, Commercial Property Associate Solicitor at Vyman Solicitors, within our Real Estate team.

This article is for general information only and does not constitute legal, financial, tax or investment advice. The application of the legislation will depend on the relevant provisions, commencement arrangements and individual circumstances. Specific professional advice should be obtained before taking action.