The UK commercial property market is preparing for a major shift following the Government’s decision to ban upwards-only rent reviews (UORRs) in new business leases across England and Wales.
Introduced under the English Devolution and Community Empowerment Act 2026, the legislation aims to prevent rents from being artificially inflated and to improve affordability for businesses. While the changes are not yet in force, landlords, investors and occupiers are already assessing the implications.
What Is Changing?
Once implemented, new commercial leases will no longer be able to include traditional upwards-only rent review clauses. Instead, rent reviews on market rent, turnover or index-linked leases will need to allow rents to move both up and down.
The legislation applies across all sectors (including offices, industrial, logistics and retail) and includes anti-avoidance measures designed to prevent landlords from contracting out of the rules.
What Does This Mean for Investors?
For investors and landlords, the biggest impact is the introduction of downside rental risk.
Prime assets in strong locations may see limited disruption, but secondary assets and weaker markets could face increased valuation pressure and greater income volatility. Lenders may also become more cautious, particularly where future rental growth is uncertain.
As a result, landlords are likely to reconsider:
- Lease lengths
- Fixed-rent structures
- Incentive packages
- Initial rental levels
What Does It Mean for Occupiers?
For occupiers, the changes create greater flexibility and protection in falling markets. Tenants may now benefit from downward rent reviews where market rents decline, potentially reducing long-term occupational costs.
At the same time, landlords may seek higher starting rents or alternative lease structures to offset the additional risk.
Why Timing Matters
With the legislation still awaiting implementation, timing is becoming increasingly important. Some landlords may seek to complete transactions before the ban takes effect, while occupiers may prefer to wait for the new protections.
The impact will vary significantly depending on sector, asset quality and location.
How TGE Can Help
At TGE, we are advising landlords, investors and occupiers on how to navigate the changing commercial property landscape. From lease restructuring and portfolio strategy to transaction timing and negotiation support, understanding the implications of the UORR ban will be critical in the months ahead.
As the market adapts, proactive lease and asset strategies will become more important than ever.