Proposed ban on upwards only rent reviews: what commercial property owners and occupiers need to know

Upwards‑only rent reviews (UORRs) have long been a defining feature of commercial leases in England and Wales.

An UORR is a clause in a commercial lease which provides rent can only increase or stay the same upon each rent review, regardless of the open market rent.

For landlords, they provide certainty of income and underpin asset valuation and lending assumptions. For tenants, they have often been viewed as inflexible and disconnected from market reality.

Against that backdrop, significant attention is now being paid to proposals under the English Devolution and Community Empowerment Act, which would ban UORRs in certain circumstances. While the legislation is not yet in force, it is already shaping negotiations, portfolio strategy and risk assessment across the commercial real estate sector.

What is changing for UORRS?

The headline proposal is a ban on upwards‑only rent review clauses in new and renewed commercial leases entered into after the Act comes into force.

Timeline for changes to UORRs

The Act received Royal Assent on 29 April 2026, however, current indications suggest it is unlikely to be in force before 2027, and may slip into 2028, but the direction of travel is clear.

Crucially, the ban is not expected to operate retrospectively. Leases completed before the commencement date should continue to benefit from UORRs, subject to some important caveats outlined below.

Which leases will be affected?

• New leases and renewals
  The ban will apply primarily to new commercial leases and lease renewals completed after the Act comes into force. This includes statutory renewals under the Landlord and Tenant Act 1954 where completion takes place post‑commencement.
• Contractual options to renew
  A significant amendment means that certain renewals pursuant to contractual options or agreements for leases dated on or after 17 March 2026 may also be liable, even if the original lease pre‑dates the Act. This applies to the rent payable on day one of the renewed term and to subsequent rent reviews.
• What does not fall within the ban
  Existing leases without contractual renewal options, agreements for lease entered into before commencement, and reversionary leases already completed, are not currently expected to fall within the ban.

Areas of ongoing uncertainty

As with any significant market intervention, key points under consultation remain, including:

• ‘Cap and collar’ mechanisms
  Cap and collar are contractual mechanisms which define minimum and maximum limits for a new rent and are typically index linked. It is not yet determined whether rent review clauses incorporating caps and collars will be treated as prohibited. For the time being, leases completed before commencement are assumed to be unaffected, but this is an area to watch closely.
• Subletting structures
  While a headlease granted today may lawfully include a UORR, subleases granted after commencement may not. This creates the possibility of misalignment between headlease and sublease rent review structures and, in some scenarios, landlords acquiring an interest with upward/downward review provisions sooner than anticipated (for example following forfeiture and relief).

Practical steps for landlords and occupiers to consider now

There are a number of practical steps which landlords and tenants should consider taking now to prepare:

• Review your portfolio
  Identify leases containing contractual options to renew which have been agreed since March 2026, to assess potential exposure.
• 1954 Act leases
  Landlords may wish to consider early renewals or regearing of protected leases before the Act comes into force to preserve UORRs for another term.
• Transaction timetabling
  Where commercially viable, progressing and completing leases prior to the Act being enforced may avoid the new regime altogether.
• Template drafting
  While wholesale changes may be premature, firms are already considering alternative rent structures as part of future‑proofing exercises.

Alternatives to UORRs?

As the market adapts to this new legislation, a number of alternative mechanisms are likely to become more common, including:

• fixed or stepped rent increases;
• shorter lease terms with higher initial rents;
• index‑linked rents (potentially without collars); and
• increased emphasis on turnover‑based structures in appropriate sectors.

A word of caution

The Act includes anti‑avoidance provisions, and it is widely expected that attempts to circumvent the ban through side agreements or overly technical drafting will be ineffective. As the industry digests the UORR proposals, we expect market practice to continue to evolve as clarity emerges.

While the ban on upwards‑only rent reviews is not yet law, it is already influencing behaviour across the commercial property market. Early awareness, careful portfolio review and informed negotiations will be key to managing risk and opportunity as the regime beds in.

How Hamlins can help

The Hamlins Real Estate team offer clients the full complement of real estate services, including commercial property, finance, litigation and construction. Whether you’re purchasing, selling or leasing commercial property, as an owner, occupier, lender, borrower, investor or developer, our well-established real estate team can provide expert advice and guidance. If you would like to find out how we can help you, please get in touch.