For decades, the rent on your restaurant could only ever go one way: up. Even when trade fell off a cliff, even when the unit next door sat empty for a year, an upward-only rent review clause meant your landlord could march the rent higher at the next review and never down. Owners have long called it what it is — unfair. Now Parliament agrees.
The English Devolution and Community Empowerment Act 2026 received Royal Assent on 29 April 2026 (GOV.UK, 2026). Buried inside a Bill mostly about councils and mayors is a measure that matters to every independent operator on a commercial lease: a ban on upward-only rent reviews. This guide explains, in plain terms, what the ban does, which leases it touches, when it starts, and the practical moves to make before your next review or renewal.
Key takeaways
- The law bans upward-only rent reviews, not rent rises. Reviews on caught leases must be able to move rents both up and down — "the upwards only element of rent reviews is removed" (Forsters, 2026).
- It covers England and Wales only. Scotland and Northern Ireland are excluded (CMS, 2026).
- It isn't live yet. The ban is expected to come into force during 2027 via further regulations (Forsters, 2026).
- There's a retrospective catch. Arrangements entered into on or after 17 March 2026 can be caught; leases granted before commencement are unaffected (Forsters, 2026).
- Other rent reviews are still allowed. Open-market, stepped, fixed-percentage and index-linked (CPI/RPI) reviews remain lawful (Pinsent Masons, 2026).
What is the upward-only rent review ban?
It's a new rule that stops commercial leases from using rent reviews that can only push the rent up. Under the English Devolution and Community Empowerment Act 2026, "Upwards Only Rent Review clauses in new and renewal commercial leases will also be banned, which previously prevented businesses' rents from decreasing after review - even if the market rate had decreased" (GOV.UK, 2026).
An upward-only rent review (UORR) clause is the small print that, at each review date, lets the rent rise to the open-market level but never fall below the passing rent — so it ratchets up regardless of trade. The clause is one of the reasons rent has felt like a one-way bet against the tenant. The government's case for change is blunt: it says UORR clauses "pit landlords against businesses", can "make rents unaffordable", and that ending them will help "end the blight of vacant high streets" (Restaurant Online, 2025).
For an independent restaurant, rent is one of the heaviest fixed costs you carry — the "additional rent" of rates and service charge sits on top of it. Anything that stops the base rent from ratcheting up automatically is worth understanding properly.
Does the ban mean my rent can't go up?
No. This is the single biggest misunderstanding, so it's worth being clear: the ban does not freeze or cap your rent. It removes the upward-only mechanic, so that a review can produce a lower rent as well as a higher one. As the law firm Forsters puts it, "Open market and index linked rent reviews will still be permitted, but the upwards only element of rent reviews is removed" (Forsters, 2026).
In practice, on a caught lease a market rent review must now work in both directions. If open-market rents in your area have fallen since the lease started, the review can pull your rent down to match. If they've risen, the rent can still go up. The change simply removes the floor that used to protect the landlord and trap the tenant.
That's a meaningful shift for hospitality, where local rents can swing sharply with footfall. UKHospitality, the trade body, welcomed it: "Unjust upward-only rent review clauses have been hitting hospitality businesses for decades, making rents unnecessarily expensive," said its Kate Nicholls (UKHospitality, 2025). Landlords and parts of the property sector have pushed back, arguing the change interferes with long-standing leasing arrangements — so expect the detail to be contested as the regulations are written.
Which leases does the ban cover?
It covers commercial business tenancies in England and Wales — the kind of lease most restaurants hold. The ban applies to "leases of commercial property in England and Wales", with Scotland and Northern Ireland excluded (CMS, 2026). If your unit is in Scotland or Northern Ireland, this particular law does not apply to you — commercial leasing there is devolved and follows separate rules.
On scope, the measure targets ordinary business tenancies — broadly, leases occupied (or capable of being occupied) for business purposes — and excludes specialist categories such as agricultural and mining leases (Pinsent Masons, 2026). A typical restaurant, café, takeaway or pub lease is squarely the kind of tenancy in view.
Timing is where it gets fiddly. The ban will catch new leases granted after it comes into force, and — importantly — renewals or options where the arrangement is "entered into on or after 17 March 2026" (Forsters, 2026). Leases granted before commencement keep their existing rent review clauses untouched (Pinsent Masons, 2026). There's also an anti-avoidance catch: a requirement in a head lease for any sub-lease to contain a UORR clause becomes ineffective (Forsters, 2026), so landlords can't simply push the old mechanic down the chain.
When does the ban actually take effect?
Not immediately — the Act has Royal Assent but isn't yet in force. Commencement depends on further regulations (secondary legislation), and the change is "expected to come into force at some point during 2027" (Forsters, 2026).
That gap matters for planning. If you are signing a new lease or renewing right now, your landlord's UORR clause may still be valid on the day you sign — but the 17 March 2026 trigger means some arrangements entered into around now could be caught once the ban commences. This is exactly the kind of timing question to put to a solicitor before you sign, not after. Don't assume the ban already protects you, and don't assume it never will.
What rent reviews are still allowed?
Plenty — the ban removes one mechanic, not the landlord's ability to review rent. The permitted alternatives include (Pinsent Masons, 2026):
- Open-market reviews — the rent is reset to the market level, now able to move up or down.
- Stepped rents — fixed amounts agreed in advance, for example £50,000 a year for the first three years, then £75,000 in years four and five.
- Fixed-percentage uplifts — a set increase such as 3% a year.
- Index-linked reviews — rent tracking an inflation index such as CPI or RPI.
One nuance to watch: the government intends to ban rental collars (a floor below which an index-linked rent cannot fall), and there is "likely" to be a consultation on caps and collars and how far they will be permitted (CMS, 2026). So an RPI-linked review with a guaranteed minimum uplift may not survive in its current form. The fine detail will come with the regulations.
What should you do before your next rent review or renewal?
Split your thinking into two buckets: what the law now does for you automatically, and what you still have to negotiate for yourself.
What the statute does for you (once it's in force):
- On a caught lease, any upward-only review will operate both ways — you don't have to negotiate that; it happens by law (GOV.UK, 2026).
- If you're renewing an existing tenancy after the trigger date, the old upward-only mechanic can fall away on renewal. Get advice on whether your renewal is caught before you agree heads of terms.
What you still negotiate (best practice, not a legal entitlement):
- Push for turnover or performance-linked rent. A rent that flexes with what you actually take is the strongest protection against a quiet year. The ban doesn't give you this — you have to ask for it.
- Negotiate a break clause. A right to exit at a set point is leverage, and a hedge if trade or the area turns.
- Be wary of index-linked deals with a floor. With collars heading for a ban, an RPI/CPI uplift that can only go up is exactly the kind of clause being legislated against — don't accept it as a quiet substitute for UORR.
- Mind the timing. Where you have a choice over when a renewal or new lease completes, the commencement date and the 17 March 2026 trigger can change whether you're protected. That's a conversation for your solicitor.
Treat the lease the way you'd treat any major supplier contract: read the review clause, model what it costs you in a bad year, and don't sign the version that only ever costs you more.
Rent isn't your only "additional rent"
Even with a fairer review mechanic, the cost of holding your premises is rising on other fronts. Business rates are the obvious one. The 2026 revaluation brought new rateable values and new multipliers from 1 April 2026 — the retail, hospitality and leisure multipliers run from 38.2p (small business) to 43p (standard) and 50.8p for the highest-value properties (UKHospitality, 2026). For a full breakdown of what you'll pay and how to challenge your valuation, see our guide to UK restaurant business rates in 2026.
The same discipline applies across every fixed cost. The lease sets your rent; rates, energy and food costs decide whether the place still works at that rent. If you're tightening the operation around it, our guides to controlling food costs in your UK restaurant and cutting your energy bills in 2026 cover the lines you can move faster than the rent.
Frequently asked questions
What is an upward-only rent review clause?
It's a lease term that, at each review date, lets the rent rise to the market level but never fall below the rent you're already paying — so it can only go up, regardless of trade or local market conditions.
Does the ban cancel my current upward-only clause?
Not automatically. Leases granted before the ban comes into force keep their existing rent review clauses (Pinsent Masons, 2026). The change bites on new leases and on renewals or arrangements caught by the timing rules.
Can my rent still go up after the ban?
Yes. The ban removes the upward-only restriction so reviews can move both ways; it does not stop rents rising where the market supports it (Forsters, 2026).
When does the ban come into force?
It is expected during 2027, via further regulations. The Act has Royal Assent but is not yet commenced (Forsters, 2026).
Does it apply in Scotland or Northern Ireland?
No. The ban covers England and Wales only (CMS, 2026). Commercial leasing in Scotland and Northern Ireland is governed separately.
What's the significance of 17 March 2026?
It's the retrospective trigger: arrangements such as renewals or options entered into on or after that date can be caught when the ban commences (Forsters, 2026), even though the lease itself completes later.
Are index-linked rent reviews still allowed?
Yes, CPI/RPI-linked reviews remain permitted (Pinsent Masons, 2026) — but the government plans to ban collars (guaranteed minimum uplifts) and may consult on caps, so a one-way index deal may not last (CMS, 2026).
Can my landlord get around it by using a sub-lease?
No. Any head-lease requirement that a sub-lease must contain an upward-only review becomes ineffective (Forsters, 2026).
Should I delay signing a new lease until the ban is in force?
Possibly, but it depends on the deal and the timing rules — the 17 March 2026 trigger means some current arrangements are already caught. Take legal advice on whether your specific transaction is affected before deciding.
Does the ban help with business rates or service charge?
No. It only affects contractual rent reviews. Rates and service charge — the "additional rent" — are separate and rising; see our 2026 business rates guide for those.
