Upwards only rent review ban receives Royal Assent

Summary

The legislation containing the upwards only rent review ban received Royal Assent on 29 April 2026. This applies to leases of commercial property in England and Wales.

While the English Devolution and Community Empowerment Act 2026 has received Royal Assent, the ban will not come into force for some time and probably not until 2027.

Leases (including renewal leases) that are being entered into now are not caught by the ban, although the ban does have one significant retrospective impact. 

Detail

The outlawing of upwards only rent reviews and their conversion to upwards or downwards reviews is one of the most significant changes for commercial leases since the Landlord and Tenant Act 1954. Rental collars or floors will be banned.

We have considered the detail of the ban in our previous Legal Updates that can be accessed here, here and here.

A key point to address is some of the press comment that the ban will affect lease renewals being entered into now.

• A renewal or any other lease entered into before the ban comes into force is not affected.
• The key retrospective impact is where a lease (renewal or otherwise) is entered into pursuant to an arrangement such as an option or agreement where the option or agreement is entered into on or after 17 March 2026.
• The arrangement must be with an existing tenant (i.e. a tenant with an existing lease) and relate to the whole or a part of the property let under the existing tenancy.

Here is a worked example of where it would be caught:

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 outside the ban (because the first lease has been entered into before the ban comes into force).
• 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 arrangement (such as an agreement for lease) being entered into with a new tenant (who does not have an existing lease), then provided that the arrangement is pre-ban, the lease pursuant to the arrangement will not be caught – it does not matter when the lease is entered into.  

It seems likely that there will be a Government consultation on caps and collars and the extent to which they will be permitted, but there is no specific detail as yet on the context in which collars would be permitted. Since the Act prohibits collars, any change would have to be implemented by way of secondary legislation.