The commercial property market is entering a significant period of change following the passing of the English Devolution and Community Empowerment Act 2026, which received Royal Assent on 29 April 2026.

Among its most discussed measures is the ban on upward-only rent review provisions in commercial leases, a long-standing feature of the UK property market that has shaped landlord income expectations for decades.

While implementation is not expected until 2027/28, the impact is already being felt. Landlords, investors and occupiers are beginning to reassess lease structures, asset values and long-term income strategies in anticipation of the changes ahead.

For commercial property owners, this is not simply a legal adjustment. It has the potential to reshape how income is secured, how assets are valued and how portfolios are managed over the long term.

What Are Upward-Only Rent Reviews?

Traditionally, many commercial leases have included upward-only rent review clauses. These provisions allow rent to increase at review dates in line with market conditions, but prevent it from decreasing, even if market rents have fallen.

For landlords, this has historically provided:

  • Greater certainty of income growth
  • Protection against market downturns
  • Stronger investment valuations linked to secure rental streams

For tenants, however, upward-only reviews have often been criticised for failing to reflect market realities, particularly during weaker economic periods.

The new legislation signals a clear shift towards greater flexibility and market alignment within commercial leasing.

Why This Matters Now

Although implementation is still some time away, the market is already reacting.

Lease negotiations taking place today are increasingly being viewed through the lens of future regulation. Landlords are beginning to consider how lease terms agreed now may perform under a very different leasing environment over the coming years.

This is particularly relevant for:

  • New commercial lettings
  • Lease renewals currently under negotiation
  • Long-term income forecasting
  • Asset valuations and refinancing discussions

Investors and lenders are also paying close attention, as income predictability remains a key factor in commercial property performance.

A Shift Towards Active Asset Management

The likely removal of upward-only reviews places greater emphasis on active asset management and tenant strategy.

In a market where rents may move both upwards and downwards, landlords will need to focus more heavily on:

  • Occupier retention
  • Lease flexibility
  • Asset quality and competitiveness
  • Tenant experience and long-term demand drivers

This could widen the gap between well-managed, adaptable assets and secondary stock that struggles to attract or retain occupiers.

For many landlords, the conversation is shifting from “How do we secure guaranteed rental growth?” to “How do we maintain asset relevance and income resilience over time?”

The Impact on Valuation and Investment Strategy

Commercial property valuations have traditionally benefited from the certainty created by upward-only rental structures.

If rental income becomes more variable, investors may place greater emphasis on:

  • Asset location and demand fundamentals
  • Tenant covenant strength
  • Flexibility of use
  • Management quality and operational performance

This may accelerate the wider market trend towards performance-led asset management, where value is created through strategy, repositioning and operational improvement rather than relying solely on market-driven rental growth.

It may also influence how lenders assess risk, particularly for assets with shorter leases or weaker tenant demand.

What Commercial Landlords Should Be Doing Now

While the legislation is not yet in force, waiting until implementation would be a mistake.

Landlords should already be reviewing:

  • Existing lease structures
  • Upcoming rent reviews and renewals
  • Tenant retention strategies
  • Long-term portfolio resilience
  • Opportunities to improve asset competitiveness

The landlords who adapt early are likely to be in a far stronger position than those who continue relying on historic market norms.

This is not necessarily negative for the sector, but it does represent a meaningful shift in how commercial property income is approached and protected.

Looking Ahead

The end of upward-only rent reviews marks one of the most significant structural changes to the UK commercial leasing market in years.

For landlords, the focus is likely to move further towards flexibility, occupier demand and proactive asset management rather than relying on lease mechanics alone to drive income growth.

As the market adjusts, strategic decision-making will become increasingly important.

Those who understand their assets, their tenants and the wider market dynamics will be best placed to navigate the changes ahead.

If you would like to understand how these changes could affect your portfolio, Kapital Real Estate can help you assess your current position and plan strategically for the evolving commercial property landscape.