On 29 April 2026, the English Devolution and Community Empowerment Act 2026 (the Act) received Royal Assent. Buried within wide-ranging devolution legislation, new provisions now prohibit upward-only rent review clauses (UORRs) in all new commercial leases in England and Wales.
Airport operators typically have steady rental income streams derived from property portfolios, which will be impacted by the reforms. The prohibition of UORRs may expose airport operators to downward adjustments in rent during periods of economic downturn or reduced passenger footfall.
This article sets out details of the new law, how this could impact the airport sector and the mitigation strategies available to protect income in the post-ban environment.
What the legislation does
Types of tenancies covered
The Act amends the Landlord and Tenant Act 1954 by inserting new provisions that prohibit upward-only rent review clauses in qualifying commercial leases.
The ban will apply to all business tenancies, whether or not they have security of tenure, across all property sectors – including industrial, office, retail, hotels, logistics and mixed-use. It will apply to tenancies made pursuant to any kind of arrangement, including renewal leases and landlord put options (but only if these arrangements are made after the ban comes into effect).
What is prohibited?
Any rent review provision in a new lease will be void to the extent that it guarantees a minimum percentage uplift irrespective of market conditions or a reference factor (e.g., tenant turnover, CPI/RPI), or prevents the reviewed rent from falling below any previously agreed level.
There is still some uncertainty as to what exactly will fall within the prohibition. A definitive stance will only be possible after further guidance has been released.
Implementation
The ban is not yet fully in force, and this will be implemented by secondary legislation, expected in 2027. A retrospective element is already in effect, with renewal leases made:
- pursuant to a contractual renewal option entered into on or after 17 March 2026; and
- granted after the ban comes into effect,
being subject to the ban when that renewal option is exercised.
How will this impact the airport sector?
How will this impact the airport sector?
Airport property portfolios are generally considered a low-risk asset class due to high demand and income certainty provided by UORRs. However, the prohibition presents a shift in risk allocation by introducing the possibility of downwards rental adjustments.
That said, it is important to distinguish between airport real estate and real estate in the wider market. As space within an airport is at a premium, airport operators can generally charge higher rents. Further, in the absence of a UORR, open market rent reviews may still deliver upwards or, at worst, flat rental outcomes given sustained demand.
Fairer share of commercial risk
Commercial risk will be more fairly allocated between landlord and tenant under the new regime. Rents will more closely track market conditions and allow for downwards adjustments (in theory).
However, in practice, negotiations are likely to continue to be shaped by the same dynamics that generally govern airport real estate. The scarcity of space and high demand within airports will continue to underpin landlord leverage, allowing airport operators to effectively exercise many of the mitigation options outlined below.
Mitigation options
Shorter terms and broader break options
Airports are dynamic environments, and airport operators can use this to their advantage by enforcing shorter lease terms. This reduces the period of exposure to downward rent movements, enabling re-letting to market at each expiry. However, this will increase transactional costs, in addition to creating income uncertainty due to re-letting risks.
A broader break option could also be used to reset the rent at regular intervals. The decision as to whether to break a particular lease could then be made with regard to market conditions at the time of the break.
Use of concession agreements
Airport operators could expand the use of concession agreements to document non-retail occupational arrangements. This allows airport operators to incorporate provisions to ensure rents will increase.
There is a risk that use of a concession agreement will fall foul of anti-avoidance provisions if a court interprets it as constituting a leasing arrangement. However, if drafted properly, these should be outside of the ban.
Fixed rent increases
Fixed, stepped rent increases, determined and agreed at the beginning of the term, are permitted under the new regime. This provides maximum income certainty for the airport operator. However, there is no flexibility - it is a gamble as to whether a tenant will end up paying more, the same, or less than the market rent in a few years' time.
Rent "top-ups"
A further option is the inclusion of a factor-linked "top-up" mechanism within the lease itself. Under this model, the base rent itself remains fixed (and would therefore be unaffected by the ban), but the tenant would be liable to pay an additional fee where a variable factor such as turnover or passenger footfall exceeds an agreed threshold. This arrangement increases the probability of an increase in income whilst simultaneously preserving a baseline rent.
Rebalancing revenue towards aeronautical income
Where non-aeronautical revenue is at risk, other aeronautical income streams remain unaffected. Airport operators could consider accelerating the disposal of real estate assets with weak demand and audit any imminent plans for further real estate acquisitions.
Though the abolition of UORRs presents a threat to rental income for airport operators, not all is lost – there are still a number of options available to increase income strength. Existing portfolios are not immediately impaired, and pre-April 2026 leases will retain their UORR clauses for their remaining terms.
If you've read this far and are based outside of England and Wales, it would be wise to take inspiration from the existing advanced UORR drafting system on how to future-proof and maximise your real estate income streams – at least before you’re banned from doing it too.
