Ban on upwards-only rent reviews: What can landlords of 1954 Act protected leases do?

The commencement of the English Devolution and Community Empowerment Act (the Act) poses a real threat to the interests of landlords whose business tenants are protected under the Landlord and Tenant Act 1954 (LTA) (as well as those that are outside the LTA). Landlords can take steps now to protect their financial interests in the future by securing an upwards-only rent review clause in their LTA renewal leases.

The Law

Business tenants under fixed-term tenancies have a statutory right to a new lease at the conclusion of their contractual term, provided that the lease has not been contracted out of the security of tenure provisions of the LTA. Tenancies protected by the LTA do not terminate automatically and continue on the same terms as the contractual tenancy, provided certain qualifying criteria is met.

Landlords can be left vulnerable to receiving below-market rent where their tenant holds over past the end of their contractual term. Historically, landlords countered this issue by ensuring an upwards-only rent review clause was included in the renewal lease.

However, the Act, which received Royal Assent on 29 April 2026, will introduce a ban on upwards-only rent reviews in commercial leases, including those that are LTA renewals of leases that previously included upwards only rent reviews. A commencement date is not yet known, but we understand that upwards-only rent reviews will remain valid in leases granted prior to the commencement of the Act.

What can landlords do?

Landlords with tenants that are holding over, or with protected tenancies coming to an end in the next 12 months, can act now to protect their future interests by serving section 25 notices.

Section 25 notices can be used to initiate renewal of the lease, allowing landlords to secure the same form of lease, including an upwards-only rent review, before the Act comes into force. After the Act comes into force, this will no longer be possible.

Section 25 notices are subject to strict compliance requirements. They must:

• be in prescribed form;
• state a termination date;
• be served up to 12 months before the end or after the end of the contractual term of the lease, but not more than 12 months or less than 6 months before the termination date contained in the notice;
• be served by the competent landlord;
• contain the competent landlord’s name and address; and
• be properly served on the tenant.

It is imperative that landlords fulfill the above requirements to ensure that their Section 25 notice is legally compliant and valid.

If you need any advice on the introduction of the English Devolution and Community Empowerment Act or serving a section 25 notice, please contact our Commercial Real Estate team.