For decades, upwards-only rent reviews have been a standard feature of commercial leases across England and Wales. However, significant legislative reform is set to change how commercial rents are reviewed, with potentially far-reaching consequences for landlords, investors and tenants alike.
What is an Upwards-Only Rent Review?
An upwards-only rent review is a lease provision that allows the rent to either remain the same or increase when it is reviewed. Even if market rents have fallen, the tenant’s rent cannot decrease.
From a landlord’s and investor’s perspective, these clauses have traditionally provided financial certainty. Predictable rental income offers greater protection against fluctuations in the property market, helping to support property valuations, investment returns and lending security.
For tenants, however, upwards-only rent reviews can result in rents remaining significantly above current market levels, particularly during periods of economic downturn. As a result, businesses may continue paying inflated rents despite falling property values or challenging trading conditions.
The English Devolution and Community Empowerment Act 2026
The landscape is set to change following the introduction of the English Devolution and Community Empowerment Act 2026 (EDCEA), which received Royal Assent on 29 April 2026.
Once the relevant provisions are brought into force,currently expected in 2027 or 2028 upwards-only rent review clauses will become legally unenforceable for most new commercial business tenancies in England and Wales.
The reform is intended to create a fairer commercial leasing market by allowing rents to better reflect prevailing market conditions, rather than preventing them from falling during periods of economic decline.
What Could This Mean for Commercial Tenants?
The reforms are expected to offer several benefits for tenants.
- Financial Protection: Tenants avoid being trapped above market rates during an economic downturn.
- Business Survival: Lower risk of retail or office insolvency caused by rigid overhead costs on high streets.
- Cash Flow Uncertainty: Budgets fluctuate because future rental liabilities can drop or rise unpredictably based on market shifts.
What Could This Mean for Landlords and Investors?
While the reforms aim to improve fairness for occupiers, they also introduce new considerations for landlords and investors.
- Income Volatility: Cash flow becomes less predictable if market-wide property values trend downward.
- Valuation Shifts: Commercial property values may reprice to reflect higher investment income risk.
- Lease Restructuring: Landlords lean toward fixed-rate stepped increases or alternative indexing to retain reliable income.
Looking Ahead
The abolition of upwards-only rent reviews for most new commercial leases represents one of the most significant changes to the commercial property market in recent years. Although the reforms are not expected to take effect until 2027 or 2028, landlords, investors and tenants should begin considering how the changes may influence lease negotiations and investment strategies.
While the legislation aims to create a more balanced and responsive leasing market, its long-term impact will depend on how landlords adapt their lease structures and how the market responds once the new rules come into force.
Considering a new commercial lease or reviewing an existing one?
Changes to the rules around upwards-only rent reviews could affect how landlords and tenants approach future lease negotiations.
If you would like to discuss the potential implications for your commercial property arrangements, speak to our commercial property team.
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September 4, 2026
