Future Homes and Buildings Standards represent ‘vital yet ambitious’ opportunity

BCIS has welcomed the publication of the Future Homes and Buildings Standards as a significant and necessary step forward for the built environment, but cautioned their success could require a delicate balancing act.

First proposed in 2019, the Standards introduce amendments to UK Building Regulations to improve the energy efficiency and carbon performance of new buildings⁽¹⁾.

The changes are due to come into force from March 2027, or September 2027 for higher-risk buildings, with a 12-month transition period running to March 2028.

Dr David Crosthwaite, chief economist at BCIS, described the Standards as ‘vital yet ambitious’, highlighting the difficulty of improving outcomes for building occupants and owners without undermining developer viability.

‘Achieving this balance will be challenging. Larger developers may be better placed to absorb additional capital costs through economies of scale, but for SMEs, managing these requirements may prove more difficult, particularly in a housing market sensitive to changing economic conditions and consumer demand,’ he added.

‘Flexibilities, such as solar exemptions for higher-risk buildings, may provide some relief, but protecting business margins will require coordinated action to ease cost pressures across the supply chain.’

The Standards aim to ensure new buildings will not require retrofitting to become zero carbon in use as the electricity grid decarbonises. Key measures include mandating on-site renewable electricity generation for most new homes and requiring low-carbon heating systems, such as heat pumps and heat networks.

In setting out its impact assessments for the Standards⁽²⁾, the government acknowledged that developers have limited incentives to build better-performing buildings. Lower energy bills and access to clean energy directly benefit building owners or occupants, rather than developers who will likely face additional costs to comply with updated regulation in an already challenging economic environment.

Dr Crosthwaite pointed to potential cost increases arising from geopolitical tensions in the Middle East as one of several pressures weighing on developers.

‘Set against ongoing geopolitical uncertainty, the government must pull every available lever. This includes maximising energy cost reductions for materials and product manufacturers to strengthening the Building Safety Regulator’s capacity.

‘Doing so could be key to avoiding unintended strain on delivery, particularly for smaller developers. At the same time, businesses can take greater control by using robust, up-to-date data and benchmarks to model project costs in a way that reflects the realities of these new standards. 

‘Insurers also have a critical role to play. As building specifications evolve, construction costs are likely to increase and reinstatement values will need to reflect this. Without access to reliable, construction-specific data to inform policy adjustments, the risk of underinsurance could increase, leaving policyholders exposed.’

Past trends in the ABI/BCIS House Rebuilding Cost Index (HRCI), which represents the UK average across different property types, demonstrate the impact of regulatory amends on rebuild costs. 

On 15 June 2022, the implementation of changes to UK Building Regulations, including Parts L and F which cover energy efficiency and air quality standards, led to a 4.5% increase in the HRCI.

To keep up to date with the latest industry news and insights from BCIS register for our newsletter here.

^{(1) GOV.UK – The Future Homes and Buildings Standards: Building Circular 01/2026 – letter – here}

^{(2) GOV.UK – The Future Homes and Buildings Standards: impact assessments – here}