The end of upwards-only rent reviews: what Welsh commercial landlords need to know.
Commercial landlords in Wales may have seen references to the English Devolution and Community Empowerment Act 2026 and assumed it affected only property in England.
It does not.
Part 5 of the Act introduces significant changes to commercial rent reviews across both England and Wales.
The Act received Royal Assent on 29 April 2026. The relevant rent review provisions are not yet in force, as secondary legislation is still required to set the commencement date.
As the law currently stands, however, the question is when the new rules will take effect, not whether the changes will happen.
What is changing?
Upwards-only rent reviews have been a familiar feature of commercial leases for many years.
They allow a landlord to review the rent at agreed intervals, but where the review calculation produces a lower figure, the rent does not fall. It either increases or remains at its existing level.
The new legislation will prohibit this type of mechanism in many new and renewed commercial leases where the future rent cannot be determined when the lease is granted.
This can include open market rent reviews, index-linked reviews and other mechanisms where the eventual figure depends on future circumstances.
Importantly, rent review mechanisms themselves are not being abolished.
Reviews that allow rent to move both upwards and downwards can remain enforceable. Fixed or stepped increases that are known when the lease is granted may also remain possible.
What else will change?
The Act goes further than simply removing upwards-only protection.
Tenants can trigger relevant rent reviews themselves by serving notice, even where the lease gives that right only to the landlord.
That could become particularly important in a falling market, where a landlord might otherwise decide not to trigger a review.
The legislation can also affect subletting provisions.
Where a superior lease requires a new sublease to contain an upwards-only rent review clause that the new rules would prohibit, that requirement can be disapplied.
This does not give tenants an unrestricted right to sublet. Existing consent requirements and other restrictions on alienation can still apply.
The Act also contains measures designed to prevent landlords from using certain renewal arrangements to require tenants to enter into a new lease at a rent above the permitted reference amount.
What should Welsh landlords be doing now?
The key point is that landlords do not need to wait until commencement before taking action.
This period provides an opportunity to review the documents you already use and prepare revised versions in advance.
That could include:
▷ Standard commercial lease templates
▷ Heads of terms
▷ Agreements for lease
▷ Lease renewal documentation
▷ Rent review clauses
▷ Subletting provisions
▷ Internal guidance used when negotiating new lettings
Preparing new draft documents now means they can be reviewed against the final commencement regulations once published, then used when the new regime takes effect.
That is likely to be far easier than discovering that your standard lease documentation needs substantial changes while a new letting or renewal is already being negotiated.
Landlords should also consider the wider commercial impact.
Upwards-only rent reviews have traditionally offered a degree of certainty around future rental income.
Changes to that position could influence property valuations, lending decisions, investment models, lease lengths, incentives, and how future rental structures are negotiated.
For portfolio landlords in particular, this is a good time to review existing lease expiry dates, forthcoming renewals, and planned lettings to identify where the new legislation may become relevant.
At Peter Lynn and Partners, we can review your existing commercial property documentation, identify the provisions likely to be affected and help you prepare updated drafts ahead of the new rules coming into force.
For advice on commercial leases, rent review provisions, renewals or preparing your documentation for the new legislation, please contact our Commercial Property team:
▷ 01792 450010
▷ peterlynnandpartners.co.uk