The UK Government intends to introduce new measures by December 2026 to protect homeowners from rogue builders and support builders doing good work. The underlying problem is familiar. A homeowner pays a large deposit, work starts late or stops altogether, and the money needed to finish the project is gone.
Championed by Prime Minister Andy Burnham, the proposal includes a voluntary Approved Code and an optional payment system that pays out at specific milestones. Although this proposal may mitigate payment risk and give reputable builders greater certainty over cashflow, the proposed scheme is still dependent on what the parties have explicitly agreed on at the project’s outset. Furthermore, because the scheme is voluntary, rogue builders can elect not to participate.
What should a building contract cover?
A payment milestone is only useful if both parties understand what must happen before it is met. “Completion of the extension” might mean a weatherproof structure to the builder but a finished room to the homeowner. A contract should connect each payment to identifiable work, rather than a broad description that leaves room for disagreement.
For a substantial residential project, the written agreement should set out the scope of work, drawings and specifications, price, programme and payment schedule. It should identify who is responsible for obtaining planning permission, arranging building control inspections and providing certificates or other documents at completion. The parties should also agree what happens if work is delayed or defects are found.
Changes deserve particular attention. Homeowners may choose different materials or ask for additional work once construction is under way. The contract should provide a process for agreeing the price and any effect on the timetable before the change is carried out. Otherwise, a conversation on site can become a dispute over what was included in the original quote.
Does the approved code guarantee a good builder?
No scheme can remove every risk. Participation in the new approved code is voluntary, and homeowners should still make their own checks. Ask about relevant experience, previous projects, insurance and who will actually carry out the work. Check that the proposed programme and price are realistic, particularly where one quote differs sharply from the others.
The payment service also needs careful consideration. Before using it, homeowners and builders should establish who decides that a milestone has been reached, whether payment can be withheld for incomplete or defective work, and how disagreements will be resolved. Builders need a payment schedule that reflects the cost of labour and materials; homeowners need confidence that payments correspond to work properly completed. These points belong in the contract as well as in the payment service’s terms.
What if the work goes wrong?
The new measures sit alongside existing consumer rights. Under the Consumer Rights Act 2015, a trader providing a service must use reasonable care and skill. Where work falls short, the homeowner may have a right to require repeat performance or, in appropriate circumstances, a price reduction. The available remedy will depend on the facts and the contract.
Keep the signed agreement, drawings, invoices and a written record of changes and concerns. If a problem emerges, raise it promptly and give the builder a clear opportunity to respond. These records can help both parties resolve a misunderstanding before it becomes a formal dispute.
The Government’s initiative is a useful prompt to think about payment protection. For a homeowner planning significant work, the most effective protection starts earlier: choosing a suitable contractor and agreeing, in writing, what will be built, when payment is due and how problems will be handled.
Quastels’ Construction team advises homeowners on residential construction contracts and disputes.
