One year after The English Devolution and Community Empowerment Bill was introduced announcing that it would be banning Upwards-only rent reviews (UORRs), this short briefing reflects on what we know about the ban, the further regulations and guidance we still require from the government and how the market has responded.
10 July 2025
Sep–Dec 2025
March 2026
17 March 2026
English Devolution and Community Empowerment Bill introduced
Commons stages; BPF and industry responds
Lords’ amendments tabled; 17 March trigger date emerges
Retrospective trigger date – an option to renew and side letters from this date can be caught
29 April 2026 Royal Assent
Mid–late 2026
2027
2027/2028
Summary
Government consultation on caps, collars and transitional rules
Secondary legislation; final drafting, lead- in period
Legislation comes into force, ban commences effective date to be set by regulations
The ban is law but not yet in force. Royal Assent passed on 29 April 2026 via Part 5 of the English Devolution and Community Empowerment Act, which inserts s.54A into the Landlord and Tenant Act 1954. The ban won't affect the upward only mechanics of a rent review clause until the government follow a consultation on, caps and collars followed by a lead in period expected no earlier than 2027.
Once commenced, upward-only mechanics in open- market, RPI/CPI and turnover reviews are overruled and a review can now produce a rent below passing. Tenants also gain a statutory right to trigger reviews if previously only the landlord could do so. Fixed and stepped rents are to remain acceptable.
What's ‘caught’ and what isn't
The ban applies to all business leases whether inside or outside the 1954 Act. This does not include agricultural leases which have their own rent review mechanics under the AHA 1986 and ATA 1995 nor Telecoms leases under the Electronic Communications Code.
For the most part, the ban will not be retrospective. Existing leases are broadly safe so a lease effective from before the legislation comes into force with an UORR clause remains enforceable even if the review date falls after the ban. The position changes on renewal: any 1954 Act renewal granted after the legislation is enforced must comply, regardless of when the original lease was granted.
An Agreement for Lease not concerning the renewal of an existing lease with a day one rent review or midterm review is only caught if it was granted after the legislation comes into force. A surrender and regrant including implied surrender where there are a fundamental variation of lease terms primarily adding to the term or adding to the demise will also get caught if the agreement is made after the legislation comes into force.
Sub- leases granted after the legislation comes into force must comply regardless of what the head lease requires including where the superior lease expressly obliges UORR provisions in any underletting.
The 17 March 2026 trigger
This trigger date is now live and was introduced whereby an option to renew, whether in the lease or in a separate side letter, which contains a rent review clause and was created as of 17 March 2026 will be upwards and downwards. This also catches an Agreement for Lease concerning arrangements to renew an existing lease. The trigger date will not apply to a reversionary lease as the lease date will be the date of the grant.
For example - a lease is entered into on or after 17 March 2026 that includes an option to renew of the same premises.
• Any upwards only rent review in that first lease will be not be caught because the first lease has been entered into before the legislation is enforced
• Since the option is entered into on or after 17 March 2026, the lease pursuant to the option is caught by the ban.
• The effect of it being caught is that any mechanism for calculating the day-one rent in the option lease cannot be upwards only and is converted to an upwards or downwards review.
• Subsequent rent reviews in the option lease will also be caught by the ban (unless in the very unlikely event that the option lease itself is entered into before the ban comes into force).
For an Agreement for Lease entered into with a new tenant who does not have an existing lease, then provided that the arrangement signed before the legislation is enforced, the lease pursuant to the arrangement will not be caught by the 17 March 2027 trigger date.
Practical implications
For lease advisory the points to focus on are:
Any deal currently in legals with an upward only or collared mechanism has a window to complete as currently drafted.
Upcoming lease expiries present early renewal and re- gear opportunities. Landlords can lock in UORR terms before commencement; occupiers know this and their negotiating hand is stronger as a result.
With the 17 March 2026 trigger date live, advice on lease renewal arrangements granted on or after this date and more specifically how the rent is determined on day one and any rent reviews during the term of the renewal lease should be addressed at heads of terms stage to avoid transaction delays.
Alternative structures are already appearing in prime markets - index-linked reviews, outside-the-Act leases, and "higher of open market or capped index- linked" mechanisms. This could further increase the polarisation between prime and secondary markets for investors.
Secondary and multi- let markets will find it harder to avoid genuine two-way reviews, deepening the prime/secondary pricing divergence.
Initial rents are likely to rise in new leases to compensate landlords for downside risk, particularly where shorter terms or break options aren't achievable.
The BPF's concern, noted by Melanie Leech, is that the implementation detail was debated for only 40 minutes in the House of Lords. The consultation on caps and collars will be critical. Until that concludes and secondary legislation follows, a significant number of grey areas will only be resolved through case law.
Sector Comparison
The ban on upward-only rent reviews appears to have been conceived with a focus on the retail/hospitality sector with the government aiming to have high street rents adjust more efficiently to market conditions thus supporting economic growth.
This is a response to the well- documented problems of the 2010s, when occupiers on long leases with UORR clauses found themselves locked into rents that bore no relation to trading reality. National occupiers entering CVA or administration repeatedly cited above-market rents as a primary driver, and the political optics of landlords enforcing upward-only reviews against struggling high street occupiers were hard to ignore. The irony is that by the time the legislation received Royal Assent in April 2026, the retail market had for the most part corrected itselflease lengths had shortened, rents had been re- based across most markets, and the combination of CVAs, lease regears and straightforward tenant attrition had done the work that Parliament is now attempting to legislate.
The structural conditions that made UORR clauses so damaging in retail (long leases, rigid review patterns, weak occupier bargaining power) have already unwound in most markets. A forward-thinking alternative would be for the government to address business rates and VAT on hospitality to lower high fixed property costs and increase hospitality profit margins.
So how will it impact other sectors?
Industrial & Logistics
• Most exposed institutional sector; long-income and sale-and-leaseback structures priced on guaranteed rental growth are most at risk.
• Prime South- East logistics will absorb two-way reviews reasonably well given structurally low vacancy; regional and secondary multi-let estates are more vulnerable.
• CPI-linked leases with collars need checking
• Stepped rents and ‘higher of open market rent or capped CPI’ likely to become the new prime market standard.
• Data centre leases on long CPI-linked terms carry the same exposure.
Industrial Open Storage (IOS)
• Shorter, flexible lease terms mean the sector is less structurally exposed than big- box logistics.
• Current supply/demand dynamics limit near-term downside risk at review in prime IOS locations.
• Longer-term income plays underwritten on UORR rental growth assumptions need revisiting.
• Harder to value with precision, which complicates the shift to index-linked or fixed structures.
Offices
• Secondary markets already softening; removing the UORR floor accelerates existing trends rather than creating new ones.
• Prime Central London and Grade A regional offices with strong occupiers will likely not be affected due to shorter leases and supply constraints.
• Most office leases have already been re-based through renewals and re-gears - the shock is less acute than in industrial.
• Stepped rents and index-linked reviews likely to feature more prominently in new office lettings and renewals.
• Secondary stock outside major cities faces the sharpest downward pressure at review.
Healthcare
• Long-term income security has underpinned healthcare investment valuations; UORR removal affects the thesis directly.
• NHS-backed covenants remain strong, but review mechanics still change on new leases and renewals.
Final Thoughts
Several key points remain unclear ahead of the legislation coming into effect, particularly the live 17 March trigger date and what this will affect as well as caps & collars on index linked reviews.
From a lease advisory perspective our role will not be fully impacted until the legislation comes into effect in 2027/28 and so today our focus should be on advising clients, leasing agents and solicitors on the risks and opportunities that the ban could create as well as presenting other lease terms such as longer leases with fixed increases or stepped rents.
As lease advisory surveyors, we need a firm grasp of how index-linked reviews are calculated, whether dealing with historic periods or those yet to fall due.
Every asset, location and occupier profile will respond differently and market forces will prevail.
