The Ban on Upwards-Only Rent Review
Whilst the Law Commission has only recently reviewed the provisions of the Landlord and Tenant Act 1954, to include the contracting out provisions, no reference had been made to rent review clauses, and no consultation had been undertaken.
Nevertheless, the Act received Royal assent on 29th April 2026, and it is anticipated that the legislation may be implemented as early as late 2026.
The provisions will apply to all leases within the Landlord and Tenant Act 1954, including contracted out leases.
It will not be retrospective and will only apply to leases granted after the provisions come into force. Similarly, it will not apply to agreements for lease entered into prior to the provisions coming in to force but will apply to lease renewals, including statutory renewals, after this date.
The Act will not apply to fixed increases or stepped rents and will only apply to rent review clauses where the rent will or may change during the term, but the amount of the increase is not known or cannot be determined when the tenancy was granted.
Further, on the face of it, rent collars (which state a minimum rent) will be ineffective and may not be used to avoid the legislation.
Full details of the legislation are yet to be concluded but the government’s intention is to ensure that high street retailers can afford rent and will not have to close. This said, many high street lettings are based on relatively short leases with no rent provisions. As such, it remains to be seen how effective this legislation will be.
The Commercial Property Team at Mullis & Peake continue to monitor changes in both legislation and case law to offer both landlord and tenant clients the best legal advice, support and assistance at all times. Watch this space for further information regarding rent review legislation.
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