One year after the English Devolution and Community Empowerment Bill unexpectedly proposed banning upward-only rent reviews (UORRs), Sam Boothby, Partner in our London lease advisory team, considers where the ban will apply, the uncertainty around its enforcement, how the market has responded, and where landlords and occupiers should focus their attention now.
The ban – what’s caught & what isn’t
The ban applies to all business leases whether inside or outside the 1954 Act. This does not include agricultural leases which have their own rent review mechanics under separate legislation.
For the most part, the ban will not be retrospective. Existing leases are broadly safe so a lease effective from before the legislation comes into force with an UORR clause remains enforceable even if the review date falls after the ban. The position changes on renewal: any 1954 Act renewal granted after the ban commences must comply, regardless of when the original lease was granted.
Although the 2026 Act is now law, the legislation banning UORRs is not yet in force. The commencement date will be set by regulations, and it is expected to be sometime in 2027/28. Until then, existing market practice remains unchanged.
However, a disconcerting ‘retrospective trigger date’ was introduced whereby an option to renew, whether in the lease or in a separate side letter which contains a rent review clause and was created post 17 March 2026 will be caught by the ban. This also concerns an Agreement for Lease concerning arrangements to renew an existing lease. The trigger date will not apply to a reversionary lease as the lease date will be the date of the grant.
There remains some ambiguity and uncertainty as to what the trigger date could catch though.
What are the practical implications for lease advisory?
As a result of this, there are a few practical implications to consider.
A deal currently in legals with an upward only or collared mechanism has a window to complete as currently drafted with the 2027/28 deadline in mind.
An upcoming lease which expires in the next 12-18 months now presents early renewal and re-gear opportunities. Landlords can lock in UORR terms before the legislation takes effect; occupiers know this and their negotiating hand is stronger as a result.
With the 17 March 2026 trigger date live, advice on lease renewal arrangements granted on or after this date and more specifically how the rent is determined on day one and any rent reviews during the term of the renewal lease should be addressed at heads of terms stage to avoid transaction delays.
We’re also seeing alternative structures being explored in prime markets - index-linked reviews, outside-the-Act leases, and "higher of open market rent or capped index-linked" mechanisms. In secondary markets landlords are suggesting longer leases with stepped rents or fixed increases avoiding any ‘rent review provisions.’
This could further increase the polarisation between prime and secondary markets for investors.
How to plan ahead
Several key points are not clear ahead of the legislation coming into effect.
However, this should not stop you from forward planning. The ban on UORRs represents one of the most significant shifts in commercial leasing for a generation. While its origins lie in addressing historic challenges in the retail and hospitality sectors, its implications will be felt across the wider real estate market.
For lease advisory professionals, the changes reinforce the importance of proactive asset management and strategic lease planning. Today, I’m focused on advising clients, leasing agents, and solicitors on the risks and opportunities that the ban could create.
Ultimately, the success of the reforms will depend not on the removal of a single lease provision, but on how effectively the market responds to a new era of lease structuring, negotiation and asset strategy.
Read the full briefing