The English Devolution and Community Empowerment Act 2026 received Royal Assent on 29 April 2026. Among its wide-ranging provisions is a significant reform of commercial property law: a ban on certain upwards-only rent review provisions in business tenancies in England and Wales.

The new regime is contained in section 100 and Schedule 37 of the Act, which introduce section 54A and new Schedules 7A and 7B into the Landlord and Tenant Act 1954.

Is the ban already in force?

No. Although the Act has received Royal Assent, the substantive rent-review provisions are not yet operational. They will come into force on a date appointed by the Secretary of State through commencement regulations.

Accordingly, it would be inaccurate to say that existing upwards-only rent review clauses have already become unenforceable. Further regulations may also introduce exceptions and transitional provisions.

What is an upwards-only rent review?

An upwards-only rent review normally provides that the new rent will be the higher of:

  • the rent payable immediately before the review; and
  • the amount produced by the agreed review mechanism, such as the open-market rent.

This means that rent can increase or remain unchanged but cannot fall, even if market rents, an index or the tenant’s turnover have decreased.

What will change?

Once Schedule 37 comes into force, an affected provision will be ineffective to the extent that it requires the reviewed rent to be higher than the statutory “reference amount”.

For example, if an open-market review produces a rent of £45,000 but the lease requires the rent to remain at the existing figure of £50,000, the upwards-only restriction would be ineffective and the reviewed rent would instead be £45,000.

The Act does not freeze rents or prevent increases. Depending on the result of the agreed review methodology, rent may increase, decrease or remain unchanged.

The legislation is capable of applying to variable reviews based on:

  • open-market or other notional rental value;
  • inflation, an index or another multiplier;
  • the actual rent payable for premises; or
  • the tenant’s turnover.

Fixed or stepped rents that are known, or can be calculated with certainty, when the lease is granted should generally fall outside the core prohibition.

Which leases will be affected?

The regime will apply broadly to qualifying business tenancies in England and Wales, including leases contracted out of the security of tenure provisions of the Landlord and Tenant Act 1954. It may also apply where the lease permits business occupation even though the tenant is not yet, or is no longer, physically occupying the premises for its business.

Existing leases will generally remain unaffected. However, the position requires particular care where:

  • a lease is varied after commencement to introduce relevant rent-review terms;
  • a new sublease is granted after commencement;
  • an existing headlease requires a sublease to contain an upwards-only review; or
  • an option or other tenancy renewal arrangement is involved.

The Act contains a significant transitional provision for tenancy renewal arrangements entered into on or after 17 March 2026. Where such an arrangement allows an existing tenant to require, or be required, to take a new tenancy after commencement, the starting rent and rent-review provisions of the new tenancy may be caught.

Additional rights for tenants

For qualifying post-commencement leases, the Act also gives tenants the ability to initiate a rent review where the contractual terms only permit the landlord to do so. Tenants may also take steps necessary to make the review operate effectively, subject to the statutory notice requirements.

Anti-avoidance provisions will render ineffective side agreements that attempt to make the tenant reimburse the landlord for a rent reduction resulting from the new rules.

What should landlords and tenants do now?

Landlords and tenants negotiating leases, renewals or options should review their proposed rent structures carefully. Particular attention should be given to:

  • heads of terms currently under negotiation;
  • agreements for lease and renewal options;
  • index-linked reviews containing caps or collars;
  • “higher of” formulae involving more than one variable amount;
  • requirements in existing headleases governing the terms of future subleases; and
  • the evidence establishing when any pre-commencement arrangement was entered into.

The Secretary of State has power to introduce exceptions by further regulations, so the treatment of more complex mechanisms may develop before commencement.

Greenwich Solicitors can advise landlords and business tenants on new leases, lease renewals, rent-review provisions and the transitional effect of the legislation. Please contact our commercial property team before agreeing heads of terms or committing to a proposed rent structure.

 

Official sources: English Devolution and Community Empowerment Act 2026, section 100, Schedule 37 and section 108.