Upward‑only rent Reviews Ban: What Retailers Need To Know

Reforms to commercial leasing in England and Wales are moving quickly. The English Devolution and Community Empowerment Act received Royal Assent on 29 April 2026, and despite most of the Act focussing on local government and the establishment of 'Strategic Authorities' the final text includes a significant tenant‑friendly change.

The new ban on upward‑only rent reviews (UORRs) is expected to reshape how retailers negotiate renewals, options and future rent mechanisms. While the implementation (commencement) date is not yet known, parts of the Act are drafted to look back to 17 March 2026, which may affect deals agreed now once the ban is brought into force.

When will the changes affect tenants?

Royal Assent has been granted, but the commencement date has not yet been confirmed (it will be brought into force by further regulations). However, the Act’s drafting creates a potentially earlier practical impact: leases completed on or after 17 March 2026 that include a contractual renewal option may be pulled into the regime when that option is exercised—even if the original lease predates commencement.

Translation for retailers: decisions you agree now on renewal mechanics could drive your rent position in a falling (or volatile) market in a few years’ time.

What protection does the ban give occupiers?

The ban will apply to all leases which are occupied by the tenant for business purposes, or which could be occupied for business purposes.

Where the ban applies, rent reviews can’t be “up only”. If the review would produce a lower rent, the tenant pays the lower figure—upward‑only wording is treated as having no effect.

For retailers, this shifts risk back toward landlords—especially on sites where values are under pressure or footfall is changing.

Crucially for tenants:

• Open market and index‑linked reviews can move down as well as up
• You won’t pay any increase that exists only because of upward‑only drafting
• Stepped rents still work – so you can keep certainty where numbers are agreed upfront.

Increased control for tenants in rent review processes

The Act is also tenant‑friendly on process. Even if the lease gives the landlord control over triggering a review or sending a dispute to an expert, tenants will get matching rights to start the process (once the relevant provisions are commenced).

For retailers, that reduces the scope for delay tactics in a falling market and supports earlier cost certainty.

Renewal options: a major shift in negotiating power

The biggest shift is on renewal options. Earlier drafts would have let some option renewals escape the ban. The amendment removes much of that carve‑out.

Now, where:

• The renewal option is agreed on or after 17 March 2026, and
• The renewal rent isn’t fixed/known when the option is granted,

The ban will apply both to:

1. The day‑one rent on the renewal, and
2. Any rent reviews during the renewal term.

That can create real leverage for retailers. The renewal rent may be set by market evidence or indexation that could produce a lower starting rent than today—an outcome that has historically been hard to secure.

Subleases and group structures

The Act also switches off “flow‑through” requirements in superior leases that force subleases to include upward‑only reviews (subject to commencement). That matters for retailers using concessions, franchises or group structures because it opens the door to more flexible sub‑rent terms.

What is next?

Given inflation very rarely falls, there is a real possibility that we see landlords begin to push for index linked reviews. The Government have promised to consult on index linked reviews particularly those manipulated inflation reviews (i.e. CPI+1%) and cap and collar rent reviews so we will need to wait for the outcome of this consultation. Whilst in principle there should be no objection to caps it is difficult to see how any form of collar would be consistent with the aims of the Act.

What should tenants and retailers be doing now?

While the ban is not yet in force, tenants should already be factoring the changes into heads of terms and asset planning, especially where renewal options are involved. Key considerations include:

• Decide whether to fix renewal rent (certainty) or keep it open (potential downside protection)
• Use stepped rents to bridge affordability and landlord expectations
• Stress‑test any existing or proposed options—they may land you in a different rent outcome than you assumed.

Overall, the reforms point to a clear rebalancing of leverage – and a chance for retailers to align occupational costs more closely with trading performance.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.