What a time to be a landlord. Both residential and commercial property owners are facing unprecedented levels of reform that will reshape the property landscape in the coming years. In addition to the Renters’ Rights Act, which came into force in May this year, a ban on upward-only rent reviews in commercial leases has now been made law following the introduction of The English Devolution and Economic Empowerment Act.

This is going to be a hot topic in the real estate world. While enforcement is expected to take place in 2027 or 2028, landlords need to start thinking now about how the changes will affect their funding strategies and consider whether they are prepared to sit on real estate or flip.

In my 20+ years of landlord and tenant commercial work rent reviews have almost always stayed the same or gone up. This has provided landlords and investors with stability. Debate has raged about the advantages and disadvantages of this new legislation – from the impact it will have on landlords who can no longer rely on a stable income, to the benefits it will offer tenants, who will receive reviews reflecting current market value and potentially see their rents reduced where market values fall.

One important aspect to consider is that it will only apply to new commercial leases where the increase is not fixed in advance. Existing leases and agreements will remain unaffected, however, renewal rights agreed on or after 17th March 2026 may fall within the ban once it’s enforced. This could significantly impact both starting rents and future reviews, so it’s important for landlords to review live transactions and recent completions that include renewal options.

Landlords need to consider the implications for financing arrangements and long-term asset management strategies sooner rather than later, in order to adapt to a market that brings greater flexibility for tenants – but this could result in less lease incentives, such as break clauses, landlord capital costs contributions, or rent-free periods for fit outs.

In cases of subleases, landlords will not need to follow upward-only provisions in headleases, although this could create potential rent mismatches. Landlords should also be aware that fixed or stepped rent increases, pre-agreed rent changes and true upward and downward rent reviews will remain unaffected.

It’s potentially good news for tenants of course, who will benefit from downward rent protection as rents can now be legally reduced. It will not be possible to contract out of the ban, and the Act introduces a statutory right for tenants to trigger a rent review, even where the lease provides that only the landlord may do so.

While the Government’s intention is to support high streets and drive economic growth, this reform introduces greater risk and uncertainty for landlords. It is therefore crucial for them to review existing portfolios, assess finances and consider future leasing strategies.

Landlords should plan ahead by creating a straightforward list of all leases with upcoming rent reviews, renewals or completions in the next 12 – 24 months. Doing this will ensure that no critical events coincide with the law’s implementation. Early planning will provide clarity on next steps and help landlords navigate these changes effectively before they come into force.

For advice on how changes to upward-only rent reviews may affect your commercial leases, property portfolio or future strategy, we’re here to help. Get in touch with Manjit Virdee at ManjitVirdee@schofieldsweeney.co.uk.