The ban on upwards-only rent reviews (UORR) under the English Devolution and Community Empowerment Act 2026 (EDCEA) will significantly affect commercial lease negotiations in England and Wales. Here we outline what landlords and tenants need to consider.
For some time now, the English Devolution and Community Empowerment Bill has been the subject of considerable debate—particularly the government’s proposed ban on UORRs in new and renewed commercial leases. It was a big surprise when first announced in 2025 and it is probably fair to say many in the industry didn’t think the proposal would get very far, or at best would be significantly watered down. This hasn’t been the case and the bill received Royal Assent on 29 April 2026, becoming the EDCEA. It will be one of the most radical changes to English and Welsh law relating to commercial leases in many years and represents a significant shift in the balance of risk between landlords and tenants.
The government has framed the ban as part of a broader effort to make commercial leasing fairer for tenants, ensure high street rents are set more efficiently, and stimulate economic growth (as discussed in our previous article found here). In practical terms, however, this reform goes beyond this: it challenges a long-standing structural feature of the UK commercial property market.
Although the ban is not yet in force, its impact is already being felt. Parties currently negotiating or documenting leases cannot afford to ignore it. In particular, there is a real possibility that leases entered into during this transitional period may still fall within the scope of the new regime, creating greater uncertainty. As a result, early and careful consideration of the EDCEA is now essential. This article provides an overview of the EDCEA, its potential impact on lease negotiations and the key considerations for landlords and tenants in preparing for the upcoming ban.
An UORR clause is a familiar feature of commercial leases. In essence, it guarantees that rent can only stay the same or increase on review—it cannot fall, even if market conditions deteriorate. UORRs can take many forms but commonly are ‘open market’ reviews, which provide a mechanism for determining the rent by reference to the open market, with any dispute typically referred to a third party for determination.
For landlords, UORRs have traditionally provided a significant degree of income security and investment certainty. For tenants, however, it has sometimes meant being locked into rent levels that no longer reflect market reality if the market rents have fallen. The concept has been criticised by some as artificially inflating rents and dampening market responsiveness—criticisms that underpin the government’s decision to intervene.
The EDCEA introduces a clear rule: UORRs will be prohibited in all commercial leases entered into after the EDCEA comes into force. This includes renewal leases granted pursuant to the Landlord and Tenant Act 1954, removing a potential route to preserve existing arrangements.
However, the legislation goes further than simply regulating future leases. It also has the potential to capture certain pre-implementation arrangements and therefore has an element of retrospective effect. In particular, the ban may apply where:
In these circumstances, any resulting renewal lease will be subject to the ban, even if the original lease contains an UORR provision. This is a notable example of why early advice on the legislation is key, and one that may catch parties off guard if not carefully considered.
Similarly, the EDCEA limits the extent to which superior leases can dictate rent review terms. While a headlease granted before implementation may not itself be affected, any provision requiring an underlease to include an UORR will simply be ineffective if the underlease is granted post-implementation. This will weaken a long-standing mechanism by which landlords have controlled income streams across lease structures.
Taken together, these provisions mean that the EDCEA is not just a prospective reform—it has immediate transactional implications. Parties currently negotiating leases must proceed on the basis that the ban could apply, even where completion occurs before the implementation date. In effect, the EDCEA has both forward-looking and immediate consequences for lease negotiations.
Further guidance from the government is expected and will be critical in clarifying some of the more nuanced aspects of the regime.
The removal of UORRs forces landlords to rethink how they manage rental risk and preserve asset value. A number of potential approaches are already emerging:
Multiple review mechanisms
The government has indicated that combining review methods will be permitted—for example, linking rent to both open market value and an index, with the higher figure prevailing. While this offers some protection, it introduces additional complexity and is likely to become an area of increased negotiation. Index linked reviews subject to a ‘collar’ (i.e. a minimum percentage increase) are likely to be subject to the ban (pending further clarity). Additionally, landlords may look to “CPI + [ ]%” options which do not currently appear to be expressly prohibited.
Varying existing underletting provisions
Landlords may look to amend existing leases to remove the requirement for upwards-only provisions to be included in underleases. Any upwards only element in a post-ban underlease will be unenforceable, creating tension with strict mirroring obligations and, in some cases, rendering them unworkable. This may lead to wider uncertainty as to how related provisions are to operate, with a risk that elements of the underletting clause are read down, disapplied or give rise to disputes over compliance and consent. This is not simply about compliance - it is also about preserving control over the structure of future underleases, which could otherwise become fragmented.
Short term leases
Shorter leases provide an alternative route to maintaining rental flexibility, allowing landlords to reset rent on renewal rather than relying on review mechanisms. However, this comes at the cost of increased turnover, administrative burden and potentially reduced security of income—factors that may impact valuation.
Staged and fixed rent increases
Agreeing stepped increases at the outset offers certainty, but at the expense of responsiveness. If market conditions shift, either party may find themselves locked into an unfavourable trajectory. This approach may also be less attractive in a competitive leasing market if initial levels are pitched too high.
Mutual break options following review
Including a break right after rent review introduces a form of ‘soft reset’. While it gives landlords an exit where the outcome is disappointing, it equally empowers tenants to walk away—introducing a level of bilateral uncertainty that landlords have historically avoided.
Higher initial rents
Landlords may (depending on the commercial context) seek to mitigate risk by agreeing higher initial rents.
Reversionary leases
Consider entering into reversionary leases now as a means of locking in future rental income with the benefit of an upwards-only rent review, while the current regime remains unchanged. Waiting to commence renewal negotiations until after the proposed ban takes effect could restrict the ability to agree such provisions thereby reducing rental certainty and long-term value. Taking early, proactive steps can provide greater control over income streams and mitigate the risk of less favourable statutory constraints applying to future lettings.
Overall, while alternatives exist, none provide a perfect substitute or replicate the certainty provided by UORRs. Landlords will need to balance reduced certainty against more flexible – but less predictable – leasing structures.
While tenants may be seen as the main beneficiaries of the reform, the new regime also introduces new considerations.
Index-linked reviews
These may become more prevalent. While they offer transparency, they may not always be tenant-friendly. Inflation has historically tended upwards, meaning that tenants are still likely to face increasing rents—just through a different mechanism.
Staged rent increases
Some tenants may prefer the predictability of fixed uplifts agreed at the outset. However, this creates its own risk: if market rents or inflation soften, tenants may end up overpaying relative to prevailing conditions.
Reversionary leases
Tenants should be aware that landlords may seek to agree reversionary lease terms now in order to secure an UORR before the ban comes into force. Those tenants with contracted-out leases will need to balance the benefit of securing continuity of occupation against the risk of being tied into terms that may prove less favourable than those available under a post-ban lease without an UORR. This risk may be mitigated by negotiating a shorter term or incorporating a break option ahead of any review.
The EDCEA introduces a further tenant-friendly measure: tenants will have the right to trigger a rent review, even where the lease does not expressly allow it. This has the potential to shift negotiating dynamics during the term of the lease, particularly where market rents fall.
Tenants negotiating leases now and in the near future should approach these negotiations with the EDCEA firmly in mind and look out for new or unfamiliar rent review mechanisms being proposed by landlords.
Ultimately, the ‘right’ approach—whether for landlord or tenant—will depend on appetite for risk, desire for certainty, commercial strategy and the market context. What is clear, however, is that rent review drafting is likely to become one of the most heavily negotiated elements of any lease.
The EDCEA marks a clear departure from established market practice. While its long-term effects will take time to play out, it is already reshaping lease negotiations and drafting priorities. As with previous legislative changes, there are likely to be unintended consequences and evolving market responses.
As such, those involved in ongoing negotiations or portfolio management should treat this issue as a priority. Early engagement and careful structuring will be key to avoiding unintended consequences.
If you would like to discuss how the ban may affect your leases or property portfolio, please contact our real estate team for further guidance.
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