The English Devolution and Community Empowerment Bill received the Royal Assent on 29 April 2026 and introduced amendments to the Landlord and Tenant Act 1954 (“the LTA”), which ban certain types of rent review clauses in new commercial leases and lease renewals. In particular, it bans “upwards‑only” rent reviews where rent can only ever increase or stay the same.

This means that commonly used rent review mechanisms linked to open market rent, inflation or turnover will be affected where they prevent rent from falling. Fixed rent increases or stepped rents will not be affected.

The new provisions also give tenants more control by allowing them to trigger rent reviews themselves, even if the lease reserves that power only to landlords.

In addition, the Bill includes anti‑avoidance measures designed to prevent landlords and tenants from using side arrangements to get around the ban. The ban will apply even if the leases are contracted out of the LTA.

The ban will not be retrospective. It will only apply to leases or agreements for lease granted after the provisions come into force, which is currently estimated to be at some point in 2027.

The position is slightly different in respect of options to renew – a provision in a lease allowing the tenant to extend their lease for another term. Where an option to renew is created on or after 17 March 2026 and is then exercised, any rent review clause in the resulting renewal lease will have to operate on an upwards-and-downwards basis. This applies whether the option to renew is contained in the lease itself or in a separate agreement.

Supporters of the reform argue that upwards-only clauses have long prevented commercial rents from falling during economic downturns, pricing small and medium-sized businesses out of town centres and other commercial districts.

By allowing rents to move both up and down, the Government aims to create a more responsive and efficient rental market which should feed into its broader goal of supporting high streets, encouraging occupancy, and stimulating local economic growth.

Whilst the reform may appear justified, it sits uneasily with the commercial property market’s need for investment confidence and predictable income streams, especially in today’s volatile political and economic climate.

For many, commercial property is viewed as a long-term, stable investment that supports debt servicing, business operations, ongoing property management and improvements. Predictable income streams, facilitated by upward-only rent reviews, therefore play an important role in maintaining confidence in the UK commercial property market.

Removing a long-standing and familiar mechanism could reduce investor confidence, heighten uncertainty and lead to more cautious or protracted lease negotiations. Landlords may price additional risk into leases, while tenants may push for greater flexibility. The outcome could ultimately depend on the bargaining power of each party, and the negotiating skills of their respective legal advisers.  

At Switalskis, we are keeping a close eye on the developments in this area and are ready to assist any existing or future clients in respect of the recent changes. If you require advice on how these changes affect you, please contact us via the phone on 0808 258 8041 or put in an enquiry via the form below and one of our experienced team members will get in contact with you.