Timing – now partly retrospective
The English Devolution and Community Empowerment Bill, containing the ban on UORRs, is likely to receive Royal Assent in late spring or early summer 2026.
The ban on UORRs is expected to take effect at a later stage, currently thought to be sometime in 2027 (called the Commencement Date in this briefing).
The ban on UORRs will impact mainly new/renewed commercial leases entered into after the Commencement Date. UORR clauses in leases already in existence on the Commencement Date will remain unaffected.
However, a recent amendment now means certain lease renewals pursuant to options dated on or after 17 March 2026 will also be caught by the ban. More detail on this below.
The legislation – summary of the provisions
The ban on UORRs will apply to all business tenancies, whether or not the lease is contracted out of the 1954 Act and even if the tenant is not in occupation of the property or has sublet it. The ban will also apply if the permitted use includes business use, even if the tenant is occupying for non-business purposes.
The ban will apply to any rent review where, on the date the lease is granted, the new rent is not yet known and cannot yet be determined. This means "stepped" rents with pre-agreed increases are not affected.
If the review clause contains an upwards-only provision, it will be of no effect. The higher amount is not payable. The new rent is what the figure would have been without the upwards-only clause.
If the rent review process requires a trigger notice, then the Bill gives the tenant the right to trigger the process even if the lease has allocated this power only to the landlord. The same applies to referring any dispute for expert determination.
If a pre-commencement superior lease requires any sublease to contain upwards-only rent reviews, that requirement will be disapplied.
Recent amendments – UORR ban retrospective in certain cases
In the original version of the Bill, the ban on UORRs would not have applied to a lease entered into pursuant to a renewal option, so long as the option was dated prior to the Commencement Date.
However, the Bill has now been amended so as to be partly retrospective. Renewal leases will now be caught by the ban, if the renewal is pursuant to an option dated on or after 17 March 2026. The ban will cover both (1) the rent payable on day one of the renewal lease; and (2) any rent reviews under the renewal lease.
The Government's explanatory note states "the purpose of the amendment is to ensure that non-statutory tenancy renewal arrangements entered into on or after 17 March 2026, and any subsequent rent reviews during the term of the tenancy, are also afforded the protection of the ban on upwards only rent reviews in order to prevent avoidance."
In other words, the Government is concerned that landlords might use renewal options as a way to get round the ban. The retrospective provisions apply to both call options and put options.
Landlords currently negotiating business leases with an option to renew should be aware that those renewal leases are likely to be caught by the ban on UORRs – both the day one rent and subsequent rent reviews during the renewal term.
Note that this is different from an agreement for lease being entered into by a new tenant – i.e. not a renewal. A "non-renewal" lease of this sort will fall outside the UORR ban if the agreement for lease is dated prior to the Commencement Date.
We will continue to monitor the progress of the Bill as it progresses to Royal Assent. In the meantime, if you have any questions, please contact Mishcon de Reya.
For more detail and some FAQs about the Bill, please see our recently updated article: Newsflash: Proposed ban on upwards-only rent reviews.