Freeholders who let out space for car washes, workshops, food-to-go, and EV charging will be affected by a forthcoming ban on upwards-only rent review clauses. Legal expert Robert Botkai explains what you need to know
What does the ban on upward-only rent review clauses mean for petrol retailers?
The English Devolution and Community Empowerment Act 2026 introduces a ban on upwards only rent review clauses in commercial leases. An upwards-only review clause allows rent to only rise and never fall, even if the market drops. Once the ban comes into force, the upwards-only element of review clauses will be void. This means that rents can go down as well as up, potentially strengthening the position of tenants by reducing the risk of overpaying for rent.
Although the Act received Royal Assent on April 29, the ban is not yet in force. Regulations are expected to bring the ban into effect in 2027/28.
Petrol retailers should prepare now. The change will affect tenants as well as freehold owners who let space for the likes of car washes, workshops, food‑to‑go, or EV charging.
What’s being banned?
The ban catches all rent review mechanisms that prevent rent from falling. Any clause that does not allow rents to go down will be void. The rent will instead be set as if the “only up” feature were removed.
Fixed or stepped rent increases will be unaffected, as these are agreed and ascertainable from the outset of the lease.
If you are a tenant (you rent your forecourt/shop)
The reform is designed to favour tenants, and we anticipate that it will significantly alter the landscape of lease negotiations.
Existing leases: Current upwards‑only reviews remain valid to expiry of the lease.
Renewals: Renewals of existing leases after commencement of the ban will be caught (with some exceptions where options to renew have been agreed prior to the ban).
New leases: If you complete a new lease before the ban, any upwards only review clauses will remain valid for full term of the lease. This will affect lease negotiations before the ban comes into effect. We anticipate seeing tenants push for upwards/downwards reviews or concessions (longer rent‑free periods, capital contributions, or break rights) in exchange for agreeing upwards only mechanisms.
If you are a landlord (you own the freehold and let space)
For many petrol retailers, sub-letting income is significant. The ban introduces unpredictability in modelling income from such leases. However, well advised landlords will still be able to achieve meaningful income protection.
Existing leases: Upwards only reviews remain valid to expiry. However, landlords should assume that the renewals of these leases will be subject to the ban and therefore will contain up or down review clauses. This should be factored into income stream planning.
Renewals: We anticipate landlords looking to renew existing leases before the ban comes into effect in order to secure upwards-only review mechanisms for longer.
New leases: Landlords will be incentivised to complete new leases prior to the ban, in a bid to lock in upwards-only review clauses. However, landlords should expect tenants to resist upwards-only review clauses before the ban comes into effect. Landlords will have to weigh up agreeing upwards/downwards review clauses with offering enhanced tenant incentives to secure upwards only review clauses.
What might the market do next?
Fixed steps and shorter terms: Fixed increases are unaffected, so some landlords may shift to shorter leases with fixed rent increases.
Variable reviews: Open‑market or index‑linked reviews that can move both ways are expected to remain valid. Index‑linked rents rarely fall, so will likely be popular with landlords.
Pricing: Starting rents may increase to offset the risk taken by landlords that rent falls during the term of the lease.
What to do now
Petrol retailers, acting both as tenants and landlords, should review their lease agreements and note expiry, break dates and opportunities for renewal in light of the above.
Although the ban is designed to strengthen the position of tenants, properly advised landlords will still be able to protect their income streams by taking steps now to lock in upwards only rent reviews or carefully drafting upwards/downwards review clauses.
- Robert Botkai is the senior partner and head of Commercial Real Estate and Licensing at Winckworth Sherwood LLP.
Neither of Winckworth Sherwood or Forecourt Trader shall be liable for any decision or action taken on the basis of this column. Nothing in this article constitutes legal advice or gives rise to a solicitor/client relationship. Specialist legal advice should be taken in relation to specific circumstances.
