The year ahead is set to bring some of the most wide‑ranging regulatory and policy changes to the UK construction and built environment sectors since the post‑Grenfell reforms. With major updates across building safety, planning, construction products, AI, contracts, payment practices and sustainability frameworks scheduled to take effect throughout the year, this overview highlights the key developments, deadlines and regulatory shifts the industry needs to prepare for.

Building Safety

The Building Safety Act 2022 (BSA) and its related legislation have transformed the regulatory landscape for the construction and living sectors, but the pace of change is far from slowing and 2026 is shaping up to be another pivotal year for building safety.  We explore the key developments expected in 2026 in detail in our article Building Safety Act 2022 what to expect in 2026.  Below is our curated snapshot of some of the key items – and where you can find further detail:

Building Safety Levy – from 1 October 2026

The Levy – described as a new tax on residential developments and affecting all new dwellings (subject to certain thresholds and exemptions) – is due to come into effect in England on 1 October 2026. The regulations implementing the levy, together with detailed guidance, were published in November 2025.
In our earlier article, we described what developers need to know ahead of October 2026 including how the levy will be calculated and collected, and which developments are chargeable or exempt. Currently, sites of fewer than 10 dwellings or 30 bedspaces in purpose-built student accommodation (PBSA) are exempt – however, this may still change.  In a consultation on reforms to the National Planning Policy Framework published on 16 December 2025, the Government is seeking views on whether the "small development exemption" should be uplifted to sites of fewer than 50 dwellings, or fewer than 120 bedspaces in PBSA.

BSR reform

From 27 January 2026, the BSR will transition from the HSE to a new independent body under the arm's-length control of the Ministry of Housing, Communities and Local Government (MHCLG).

The building control regime for the design and construction of higher‑risk buildings (HRBs) — defined as buildings at least 18 metres tall (or seven storeys), in England, that contain at least two residential units, as well as care homes and hospitals — has been overseen by the Health and Safety Executive (HSE) as the Building Safety Regulator (BSR) since it came into force on 1 October 2023. Teething problems and resource constraints at the BSR have meant substantial delays to anticipated timeframes. However, data published in late 2025 shows improved approval times, particularly since the establishment of the new fast-track "innovation unit" in summer 2025 to handle new build HRB applications.

Single Construction Regulator – prospectus published

The first recommendation in the Grenfell Inquiry Phase 2 Report was for a single construction regulator to draw together functions relating to the regulation of buildings, products and professionals. This would include some of the current work of the BSR, the National Regulator for Construction Products (NRCP) and new functions not covered by any regulator.

On 17 December 2025, the Government published its Single Construction Regulator Prospectus - Consultation Document. This sets out proposals for an integrated regulatory system and seeks views on a number of questions. The consultation will close on 20 March 2026 and the Government has committed to publishing its response in summer 2026.

HRBs – no change to 18 metre height threshold

The Grenfell Inquiry Phase 2 Report also called for a review of the definition of HRBs, commenting on the "arbitrary" focus on the height of a building and citing other critical factors such as the building’s use and the presence of vulnerable individuals. The BSR completed its review in December 2025, finding that there is insufficient evidence at present to suggest that the definition of HRBs should be changed. This will however be kept under "ongoing review".

Building Regulations and Approved Document B under review

Interim findings from the BSR's Fundamental Review of Building Regulations Guidance are expected in spring 2026 with its final report in summer 2026. In December 2025, the Government published a number of fire safety research papers, including with respect to care homes, trigger thresholds, and construction technologies as part of its Continuous review of Approved Document B.

Construction products

In May 2025, we reported on the Government's  Construction Products Reform Green Paper (the consultation), which identified the need for system-wide reform to fill "critical gaps" in the construction products regulatory framework.

The next key development on the horizon in 2026 will be publication of a "Construction Products Reform White Paper" which will set out the plans to take forward this system-wide reform. This is expected in spring 2026. In addition, on 8 January 2026, the  The Construction Products (Amendment) Regulations 2025 came into force, enabling the continued recognition of CE marking alongside UKCA marking for construction products placed on the UK market.

Building Safety litigation

There has been a steady increase in building safety case law over the past three years, and we are expecting further landmark decisions from the courts in 2026. Notably, the Supreme Court will hear the appeals in:

However, the Supreme Court will focus on a single issue: whether Remediation Contribution Orders (RCOs) can lawfully cover costs incurred before s.124 took effect on 28 June 2022, when the relevant provisions of the BSA commenced. The Supreme Court has refused ground to appeal on the question of when it is “just and equitable” to make an RCO. This means the Court of Appeal decision on that point is final.

Cases involving Building Liability Orders (BLO) have been relatively limited so far, but further BLO cases are likely to make their way through the courts in 2026. BLOs are orders which may be made by the High Court – again, if it considers it "just and equitable" to do so – which 'pierce' the corporate veil and extend liability for defective construction work to associated entities such as parent or group companies.

Second staircase requirements in force from 30 September 2026

Amendments to Approved Document B mean that from 30 September 2026, new building control applications (or previous applications which have not "sufficiently progressed" by that date) for residential buildings of 18 metres and above will require two separate staircases to meet fire safety requirements. For more detail, please see our previous insight or contact Gemma Whittaker in our Building Safety team.

Building Safety in Wales

In our article on key regulatory changes coming into force in Wales in 1 July 2026, we described key upcoming changes to the building safety regime in Wales including;

  • a duty holder regime, similar to the regime in place in England, that will apply to all "building work" ; and
  • a new regulatory regime governing the design and construction of higher-risk buildings (HRBs) in Wales.

The Building Safety (Wales) Bill also continues to make its way through the Senedd and is expected to become law in 2026. It will establish a new building safety regime in Wales covering the occupation and ongoing management of multi-occupied residential buildings.

AI in construction and dispute resolution

Artificial intelligence (AI) remains at the forefront of industry attention in 2026, with rapid developments set to continue.

As the use of AI tools becomes embedded across the project lifecycle, legal practitioners need to ensure that international construction contracts are drafted and administered with this in mind. Our recent article considering how AI is transforming international construction projects and what legal disputes could follow explores the types of dispute that may arise from AI-assisted design, scheduling, site management and quality assurance, and sets out practical ways to allocate and manage those risks when preparing contracts.

Clear definitions of AI use cases, data ownership and access, responsibility for model outputs, verification and audit rights, cybersecurity and compliance obligations, and appropriately calibrated liability and insurance provisions are likely to be key features of robust contractual frameworks in 2026.

The legal industry is also continuing to test how it can harness AI within dispute resolution itself. 2025 saw the launch of the first “AI arbitrator”, signalling the start of a new conversation about the appropriate role of AI in construction arbitration – we discuss this in our article on the AAA-ICDR AI Arbitrator: a new era in construction arbitration?

In parallel, industry bodies such as CIArb (see our article Governing AI in arbitration and the CIArb AI Guideline) have started to issue guidance on responsible AI use in arbitration and related proceedings, including governance, transparency, confidentiality, and the supervision of AI-assisted work product. These developments point towards increasing normalisation of AI tools across case management and evidence handling during 2026, provided that use remains transparent, proportionate and subject to human oversight.

Insolvency and supply chain uncertainty 

Although there are some signs of stabilisation, insolvencies remain high in the UK construction sector. The Insolvency Service again reported that the construction sector experienced the highest number of insolvencies of any sector in England and Wales in the 12 months to November 2025 (with 3,950 company insolvencies reported, or 17% of all company insolvency cases). There is a slight easing of insolvency figures from the same period last year (when 4,208 insolvencies in the sector were reported); despite this, conditions remain challenging and we continue to advise our clients on measures that can be adopted to provide for pressures and uncertainties in their contracts. This might include, for example, the viability of direct payment mechanisms and tools that can be employed where projects are 'in-flight' to spot and mitigate against the risk of struggling suppliers and employers.

Please get in touch if you would like advice on early warning signs of insolvency in the supply chain, and practical steps that you may take pre-insolvency, on insolvency and post-insolvency.

Payment reform and a possible end to construction retentions...?

The Companies (Directors’ Report) (Payment Reporting) Regulations 2025 came into force on 1 January 2026 and introduce new reporting requirements for large companies to include statements within their directors' reports concerning their payment practices and performance.

Alongside this, payment regulation may also be set for a shake-up in 2026 as we await the outcome of the  UK Government's landmark late payment reform consultation. The consultation outlined eight proposed new legislative measures aimed at tackling poor payment practices in the UK economy. In particular, as we explained in our insight, it proposes to put an end to the long-running debate around retention payments in the construction sector by amending the Housing Grants, Construction and Regeneration Act 1996 to either:

  • prohibit the use of retentions outright; or
  • introduce requirements to protect retention funds deducted and withheld from insolvency and late or non-payment.

If this proposal becomes law, this would arguably be one of the most transformative changes for the construction industry in respect of payment in decades. The consultation closed in October 2025 and a response is expected in early 2026.

Sustainability and environmental, social and governance (ESG)

Sustainability and environmental, social and governance (ESG) issues remain high on the agenda in the construction sector for 2026,

In December 2025, the Government published its updated Environmental Improvement Plan (EIP), its statutory strategy for improving the natural environment under the Environment Act 2021. It outlines the steps it intends to take and sets interim targets to keep the UK on track to meet its long-term statutory targets.

Our planning and environmental lawyers discuss the key themes and headlines of the EIP and what they mean for businesses including the construction industry.

Certain construction businesses will also be affected by the UK's Carbon Border Adjustment Mechanism (CBAM), which the Government has announced will apply from 1 January 2027. This will directly impact businesses who import £50,000 or more of specified goods from the aluminium, cement, fertiliser, hydrogen, and iron and steel sectors over a 12 month period, and businesses that use these goods in their supply chain will also be indirectly impacted.

Finally, in our insight a year ago, we reported on the publication of the pilot Net Zero Carbon Buildings Standard, which aims to provide a consistent approach to assessing whether a building can be defined as Net Zero Carbon (NZC). Version 1 of the NZCBS, which may be utilised by "anyone who wants to either fund, procure, design, or specify a Net Zero Carbon Building and anyone wanting to demonstrate that their building is 'Net Zero'-aligned with an industry-agreed Standard", is due for publication in early 2026.

JCT 2024 - and supreme court has the final word on clause 8.9.4

The Joint Contracts Tribunal (JCT) published its new 2024 suite of contracts on a rolling basis from April 2024 to June 2025, when it issued its new Target Cost Contract family. We reported on these in our articles on the Design & Build, Minor Works, Intermediate Building Contract, and Essential Insights on JCTs Latest 2024 Contract Suites.

Those still using JCT 2016 should be aware they will be withdrawn from sale from 31 March 2026 and no longer available for purchase in hard or digital format.

In January 2026, in its first judgment of the year so far, the Supreme Court handed down a landmark decision for the construction industry in Providence Building Services Limited v Hexagon Housing Association Limited. As explained in detail in our article on the judgment, this provides the final word on when a contractor can pull the plug on an employer under clause 8.9.4 of the JCT Design and Build Contract 2016.

To discuss how these 2026 UK construction and building safety reforms may impact your organisation, please get in touch with Jessica Tresham, Gemma Whittaker, Ruth Griffin or Emma Knight. Our UK construction and regulatory specialists are available to support with any queries.