Questions landlords might have about the ban on upwards only rent reviews

The ban is contained in Schedule 36 of the English Devolution and Community Empowerment Act 2026

The government has said a ban is necessary because upwards only rent review clauses lead to artificially high rents during economic downturns resulting in lower profits for tenants and higher prices for consumers. However, the ban is not limited to the retail sector – it will apply to all business leases.

The government’s aim in introducing the ban is to “ensure high street rents are set more efficiently, and stimulate economic growth”. However, many investors, including many pension funds, are concerned about the uncertainty that upwards and downwards rent reviews would bring.

Which leases would the ban affect?

The ban will apply to all leases which are occupied by the tenant for business purposes, or which could be occupied for business purposes. The second element was included (as the Bill passed through Parliament) because as originally drafted the ban only applied if the tenant was in occupation so a lease where the tenant was not in occupation (because for example they had sublet) was not subject to the ban. A “business” includes not for profit businesses such as sports clubs. The ban does not extend to agricultural or mining leases.

Will the ban apply to existing leases?

No. Rent review clauses in leases granted before the ban comes into force are not affected. Equally, leases granted pursuant to “an arrangement” in place before the ban comes into force will not be affected. Where a lease is renewed using the procedure in Part 2 of the Landlord and Tenant Act 1954, that new lease will be subject to the ban. Similarly, a lease granted pursuant to an option to renew contain in a lease entered into on or after 17 March 2026 will be subject to the ban. For example, let’s assume that the ban comes into force on 1 January 2027. The landlord and the tenant enter into an agreement for lease on 1 May 2026 and the lease is granted on 18 January 2027 for a term of 10 years, with an option to renew for an additional 10 years, in both cases with rent reviews every 5 years. The first rent review in 2032 will not be subject to the ban because the first lease is granted pursuant to an arrangement (the agreement for lease) in place before 1 January 2027. However, the rent payable on the grant of the renewal lease in 2037 and the rent review under that renewal lease in 2042 will both be subject to the ban.

What is an arrangement for these purposes?

Arrangement is not a defined term in the Act. When the Bill was first laid before Parliament the reference was to a “contract” and an “arrangement” must be wider than a “contract” and will include options as well as traditional agreements for lease.

Will the ban apply to a rent review in a side agreement?

Yes.

What sort of rent reviews would be subject to the ban?

The ban would apply to

• traditional open market rent reviews;
• rent reviews linked to inflation or other index or multiplier;
• rents linked to turnover,

if the rent payable after the review date is unknown and can’t be ascertained when the lease is entered into.

Does that mean a stepped rent would be OK?

Yes, a stepped rent – for example, £50,000 per annum in the first three years and then £75,000 in years four and five – will be unaffected by the ban. Equally, a rent subject to a fixed increase of 3% pa – so, a multiplier of 1.03 – will be unaffected as that is ascertainable when the lease is granted.

Given that inflation very rarely falls, will landlords switch to index linked rent reviews?

This must be a real possibility and means that rent will be linked to the increase in the value of money rather than the value of property, which seems at odds with the government’s intended aims.

Would an increase based on CPI+1% or similar be OK?

With uncertainty around the future of RPI, we are seeing CPI + 1% as an alternative to RPI being applied in the market. The ban doesn’t appear to prevent increases linked to such a “manipulated” inflation figure. However, guidance confirming this would be useful. A figure of, for example, RPI + 4% would make it unlikely that that the rent would ever go down, but it is questionable whether a tenant agree to a rent review on that basis.

For complex properties we have rent review which is to the higher of open market value or increase in RPI. Would that still be OK?

Unfortunately, this is an area where the wording in the Act is unclear, although we understand that this type of arrangement is not is not intended to be caught by the ban and that the point will be covered by government guidance. However, we will need this guidance to be published to be able to confirm this.

Will an increase based on CPI with a cap and collar be OK?

The Government have promised to consult on cap and collar rent reviews so we will need to wait for the outcome of this consultation. Whilst in principle there should be no objection to caps it is difficult to see how any form of collar would be consistent with the aims of the Act.

Can I have a rent review which, for example, is the higher of RPI and a multiplier of 1.02?

This is essentially an RPI increase subject to a collar of 2%, so presumably, will be looked at as part of the consultation on cap and collar reviews.

Can I get round the ban by saying that the rent review can only be triggered by the landlord?

No. If a review only takes place if triggered, the tenant will be allowed to trigger the review even if this is not provided for in the lease.

Can I get round the ban by having a five-year lease with a put option requiring the tenant to take a new lease at the higher of the rent passing and the open market rent?

No. The Bill contains specific anti-avoidance provisions so that the initial rent in the new lease will be the market rent even if this is lower than the passing rent. As mentioned above, these provisions apply to rent payable at the start of a new lease entered into pursuant to an option to renew (or other arrangement to renew) contained in a lease entered into after 17 March 2026 not just those entered into once the ban is in place. Landlords granting a lease now (before the ban comes into force) for a term of, for example, 10 years with an option to renew for another 10 years, should consider seeing if the tenant will agree to take a 20 year lease with a break in year 10 as an alternative so that the rent can be increased in years 10 and 15 although taking a longer lease will have SDLT implications for the tenant irrespective of whether or not the break is exercised.

Can I include a provision so that the rent couldn’t fall by more than say 10%? The rent review would be upwards and downwards but couldn’t go into free fall.

No. This will be covered by the ban.

Could I have an upwards and downwards rent review but with a provision that, if the rent goes down the tenant pays an additional sum equal to the fall in the rent?

No. This avoidance tactic is specifically dealt with in the Act..

As a landlord, can I charge more for the initial rent on the basis that the rent might go down after the review date?

Yes, if the tenant is prepared to pay this.

This analysis was updated in April 2026 to reflect the legislation receiving Royal Assent.