Upwards only rent review ban: What is caught and when

• 13 May 2026
• News
• Commercial real estate

With the English Devolution and Community Empowerment Act 2026 (the “Act”) having received Royal Assent, we have summarised the key provisions and set out various hypothetical lease scenarios to indicate whether or not the ban pursuant to the Act will apply. We have also put together a table which gives more detailed analysis of whether, and when, each transaction type is caught by the ban.

Executive summary

• The Act is not yet in force. It is expected to come into force at some point during 2027.
• Leases granted before the Act is passed will not be caught, save for options to renew and agreements for renewal leases which are entered into on or after 17 March 2026, as discussed further below.
• Open market and index linked rent reviews will still be permitted, but the upwards only element of rent reviews is removed by the Act.
• Initial guidance from the Ministry of Housing, Communities and Local Government is that rent can be reviewed to the higher of two references (e.g. the higher of open market and index linked rent) provided that the review is not upwards only.
• Stepped rents will be allowed as these are fixed amounts known at the grant of the lease.
• The position on caps and collars is not provided for in the Act and we expect this to be subject to government consultation.
• The Act contains anti-avoidance provisions meaning that (for example) side letters with rental top ups should the rent decrease on review will not be valid. Leases also cannot contain provisions stating that only the landlord can trigger the rent review. Tenants will be allowed to trigger the rent review even if this is not provided for in the lease.
• The Act will also catch underleases granted once the Act is in force, meaning that provisions in leases obliging underleases to contain upwards only rent reviews will not be enforceable.

Example scenarios

1. Lease completed 8 May 2026 with a new tenant. This is not caught as it was entered into before the ban came into force.
2. Lease completed 8 May 2025 with option to renew. Neither the lease nor the subsequent renewal lease will be caught as they are not caught by the pre-commencement provisions which apply from 17 March 2026 onwards.
3. Reversionary lease to tenant completed 8 May 2026. This will not be caught as it was entered into before the ban has come into force.
4. Agreement for lease with a new tenant entered into 8 May 2026, and the lease completed 1 December 2026 (assuming the ban came into force in 2027). This is not caught as the agreement for lease is with a new tenant and is therefore not subject to the 17 March 2026 date, and it was entered into pre ban.
5. Agreement for lease with a new tenant entered into 1 December 2026, the lease completes 1 June 2027 (assuming the ban has come into force). Despite being granted post ban, the lease will not be caught as the agreement for lease was entered into before the ban came into force, and is with a new tenant and therefore not subject to the 17 March 2026 date.
6. Agreement for reversionary lease (with existing tenant) entered into on 1 February 2026. This is not caught as it was entered into before 17 March 2026.
7. Agreement for reversionary lease (with existing tenant) entered into on 1 May 2026. This was entered into post 17 March 2026 and so the Act will apply. The subsequent lease will not be caught by the ban on upwards only rent reviews if it completes before the ban comes into force, but will be caught if it completes afterwards. There is uncertainty around whether the day one rent review under the reversionary lease will be caught regardless of when it is entered into. See our comments at point 4 of the table below.
8. Lease granted 1 February 2026 and underlease granted 1 May 2026. Neither the lease nor underlease will be caught by the ban as both were granted before the Act came into force.
9. Lease granted 1 February 2026, underlease granted 1 January 2028. Assuming that the ban has come into force during 2027, the underlease will be caught as it was entered into post ban. The lease will not be subject to the ban as it was entered into before the ban came into force. You will therefore have a lease with upwards only rent reviews, and an underlease that must provide for upwards/downwards review. The provisions in the lease requiring the underlease to have substantially the same rent reviews will not be enforceable.

Next steps

We are awaiting the government consultation on caps and collars, along with hoped for guidance on the points of uncertainty that we have highlighted, and will keep you updated once we have further details.

This note follows our earlier update on the Act receiving Royal Assent and provides a more detailed look at when the ban will apply in practice, read here.

If you would like more information on this note, or have a question relating to a particular transaction, please speak to your usual Forsters contact who will be happy to review and advise further.