The English Devolution and Community Empowerment Act 2026 received Royal Assent on 29th April. One of its less scrutinised effects is the abolition of upwards only rent reviews in commercial property leases. This represents a clear shift in how risk is shared between landlords and tenants.
For decades, upwards only reviews have underpinned investment in UK commercial property by guaranteeing that rents would not fall, supporting stable income and strong valuations. Their removal introduces genuine market exposure for owners and investors. Rents can now move down as well as up. This brings the UK closer to more flexible, market-aligned leasing models seen elsewhere in Europe.
For tenants, particularly SMEs and high street occupiers, this is a significant win – it reduces the risk of being locked into high rents during economic downturns, and in theory, should improve affordability.
For landlords and investors, however, this change challenges the long-standing position. Income streams may become less predictable, which in turn may impact valuations, lending, and investor sentiment. At least in the short term until the dust settles. In response, we may see a shift towards shorter leases, turnover rents, and other mechanisms designed to manage this new risk.
For a reform that cuts across valuation, lending, and long-term investment structures, many in the industry argue that the policy has been enacted without sufficient technical engagement. This has led to concerns that the pace of reform may have outstripped a full understanding of how deeply embedded rent reviews are within commercial property markets.
For expert guidance navigating rent reviews, lease advisory, or valuation matters, please contact Sheldon Bosley Knight on 01789 387882 or 02476 228111.