What commercial landlords in Kent need to know about the new rules
For generations, the upward-only rent review has been one of the reassuring features of commercial property ownership.
Whether you're an existing or prospective Landlord or a hard pressed tenant securing expert legal advice when the question of rent reviews is crucial. In this article Senior Solicitor Gareth Harvey outlines the existing position on rent reviews and what lays ahead. He also explains why working with a commercial property solicitor is essential to help protect your interests though out the term of your lease.
For more information, please 'Get in Touch' with our specialist solicitors and lawyers in our Commercial Property Department based in our offices at Ashford, Cranbrook and Hythe
Historic Position
The principle was simple: when the rent was reviewed, it could go up — but it could not go down.
For landlords, that has provided something rather valuable: predictability. For tenants, particularly during difficult economic periods, it has sometimes felt rather less like predictability and rather more like being strapped into a rollercoaster which only has an uphill track.
That familiar arrangement is now facing a significant change.
The English Devolution & Community Empowerment Act 2026 has introduced legislation to prohibit upward-only rent reviews in certain new and renewal commercial leases in England and Wales. The Act received Royal Assent on 29 April 2026. However, the relevant provisions are not yet in force, and a commencement date will be set by regulations.
So, if you are a commercial landlord in Kent, should you be worried?
The short answer is: you should certainly be paying attention.
What is an upward-only rent review?
An upward-only rent review, or UORR, is a clause which allows the rent to increase or remain the same when a review takes place, but prevents it from falling.
Traditionally, these reviews have been particularly common in longer commercial leases. A lease might provide for an open-market rent review every three or five years, for example, but with an important safety net for the landlord: if market rents had fallen, the rent would simply remain at its existing level.
The attraction for landlords and investors is obvious.
A property producing a predictable rental income is generally easier to value, finance and sell. Lenders and investors like certainty. Pension funds and other long-term investors have also historically valued the income security that upward-only reviews can provide. RICS has highlighted concerns about the potential wider effects of removing that certainty from commercial property investment.
The Government, however, takes a different view.
Its stated policy objective is to make commercial leasing fairer for tenants, improve market efficiency and help support struggling high streets and town centres. The Government's explanatory material says that upward-only reviews can leave tenants paying rents above prevailing market levels during economic downturns.
Does the new law affect my existing lease?
This is probably the first question most landlords will ask. Generally, no.
The legislation is aimed primarily at new and renewal business tenancies once the relevant provisions come into force. Existing leases are not simply being rewritten overnight.
That means that if your commercial lease already contains a valid upward-only rent review clause, the introduction of the new legislation does not automatically make that clause disappear.
This is important for landlords with established investment portfolios. An existing lease should not be assumed to have lost its rental protection merely because the law has changed.
However, there is an important qualification.
The legislation contains transitional provisions which mean that some arrangements connected with future renewals can be caught. In particular, the Act contains provisions concerning "tenancy renewal arrangements" entered into on or after 17 March 2026. These can include arrangements under which a new tenancy can be required in the future.
If you have renewal options, agreements for lease, extension arrangements or other mechanisms which could lead to a new tenancy, it is worth reviewing them now.
A ten-minute conversation with your solicitor can be considerably cheaper than discovering the problem several years — and several rent reviews — later.
What happens to new commercial leases?
This is where the biggest change will occur.
Once the relevant provisions come into force, the legislation will prohibit certain upward-only rent review provisions in business tenancies in England and Wales.
The legislation is deliberately broader than simply banning a clause which says "upwards only". It looks at the effect of the rent review mechanism.
That matters because clever drafting is not likely to provide a magic escape hatch.
The legislation is intended to prevent arrangements which, in substance, achieve the same result — namely, stopping the rent from falling when the relevant review mechanism would otherwise produce a lower figure.
For landlords, this means that the old approach of simply inserting an upward-only provision into the firm's standard lease precedent will no longer be sufficient.
Lease drafting will need to change.
Does this mean landlords can never increase rent?
Absolutely not.
The new legislation does not ban commercial rent reviews.
Nor does it mean that landlords are prevented from agreeing sensible rent structures.
The legislation continues to recognise different methods of setting commercial rent, including mechanisms based on market rent, inflation or an index, and turnover. Fixed or stepped rents agreed at the outset are also fundamentally different from a variable rent review because the future rent can be established when the lease is granted.
The real issue is whether a variable review mechanism is structured, so that it can only move in one direction.
That creates an opportunity for landlords to think more creatively about how their leases are structured.
Depending upon the circumstances, alternatives might include:
- genuinely upward and downward open-market rent reviews;
- fixed or stepped rents;
- index-linked reviews;
- turnover-based arrangements;
- carefully structured caps or collars, subject to the final regulations; and
- shorter lease terms or more frequent reviews.
The Government has specifically left scope for regulations to create exceptions or modifications, including potentially allowing certain caps and collars. The precise detail remains to be seen.
So this is not necessarily the end of rental certainty.
What does this mean for landlords in Kent?
Kent has a wonderfully varied commercial property market.
From high-street shops and hospitality businesses to industrial units, offices, warehouses and mixed-use developments, landlords are dealing with very different tenants, properties and investment objectives.
That makes a "one size fits all" response particularly unhelpful.
For a landlord with a long-term investment property, the key concern may be protecting capital value and maintaining a dependable income stream.
For a developer, the priority may be making a pre-let attractive enough to secure funding.
For a private landlord with a small portfolio, simplicity may be more important than squeezing every possible percentage point out of the rent.
The right answer will depend upon the property, tenant, lease length, financing arrangements and investment strategy.
That is why lease review and redrafting should be viewed as a commercial exercise, rather than simply a legal housekeeping task.
What should landlords do now?
There is no need to panic — but there is every reason to prepare.
First, review your existing leases.
Identify which leases contain upward-only rent reviews, when those reviews occur and whether there are upcoming renewal or extension rights.
Secondly, look at your standard lease precedents.
If your precedent leases have been drafted on the assumption that every rent review will be upward-only, they will need reconsidering before the new regime takes effect.
Thirdly, review transactions currently in negotiation.
Heads of terms are particularly important. Agreeing a commercial deal on the assumption that a particular rent review mechanism will be available, only to discover later that the drafting cannot implement it, is an avoidable headache.
Finally, keep an eye on the commencement regulations.
The legislation has been passed, but the detailed implementation remains important. As RICS has noted, the change represents a significant rebalancing between landlord and tenant interests.
The legislation itself can be read on legislation.gov.uk, while RICS provides useful professional insight into the changes.
What about tenants?
Tenants should not assume that the new rules mean they can simply demand a lower rent.
Commercial negotiations will remain commercial negotiations.
However, the new regime potentially gives tenants greater protection against being locked into an above-market rent following a downturn.
If you are a tenant approaching a lease renewal, negotiating a new lease or considering an extension, it may be worth taking advice before agreeing heads of terms.
The rent review provisions could have a significant effect on the total cost of occupation over the lifetime of a lease.
A seemingly small clause can become a very large number when multiplied over ten or fifteen years.
The bigger question: what is your lease really worth?
The arrival of the upward-only rent review ban is a good reminder that a commercial lease is not simply a document which sits quietly in a filing cabinet.
It is an important financial asset — or liability — which can affect rental income, property value, financing, business costs and future negotiations.
For landlords, the challenge is to preserve as much rental certainty as possible without relying on a mechanism which the new law will prohibit.
For tenants, the opportunity is to understand whether greater flexibility can be negotiated and whether an existing or proposed lease still represents good value.
And for both sides, the safest approach is the same: understand the rules before you sign.
A sensible time to review your commercial leases
The new legislation does not mean that every existing upward-only rent review clause is suddenly invalid.
But it does mean that commercial landlords and tenants should be thinking ahead.
If you own commercial property in Kent, now is a sensible time to ask:
Which of my leases contain upward-only rent reviews?
When are the next reviews and renewals?
Will any existing options or arrangements create a new tenancy?
Do my standard lease documents need updating?
What alternative rent structures could protect my investment or business?
Conclusion
If you are unsure about any of those questions, it is worth getting advice before the issue becomes urgent. Early advice can help you understand what the changes mean for your particular property, identify potential problems and, where appropriate, put a practical strategy in place before the new rules take effect.
If you are a landlord, tenant, investor or property professional in Kent and would like your commercial lease reviewed in light of the new rent review regime speak to our specialist solicitors and lawyers in our Commercial Property Department today
This article is intended as a general guide to the current position and does not constitute legal advice. The detailed operation and commencement of the new regime may depend upon further regulations. Specific legal advice should be obtained in relation to any particular lease or transaction.