The 2025 Autumn Budget and building safety

[edit] Context

The 2025 UK Autumn Budget, delivered on 26 November 2025, was widely framed by ministers as a blueprint for long-term growth and safeguarding public finances. But for industry stakeholders, particularly those engaged in building safety, its significance extends beyond fiscal housekeeping and marks a critical moment for the ongoing implementation of the building safety regime and the drive to finally resolve structural fire safety defects across the housing stock. A regime, developed in the aftermath of the Grenfell Tower fire and introduction of the Building Safety Act 2022, that is now shaped in practice by budgetary decisions and funding, setting expectations for remediation, bridging policy with market reality.

[edit] Building Safety Levy

At the heart of the fiscal settlement is the Building Safety Levy, a policy tool rooted in the Building Safety Act that was designed to ensure the costs of historic remediation work are shared fairly between industry and the public purse. Under section 58 of the Building Safety Act 2022, the levy grants HM Treasury powers to impose a targeted tax on new residential developments requiring building control approval in England, with the explicit aim of raising revenue for building safety expenditure. Regulations governing this levy, The Building Safety Levy (England) Regulations 2025 have been laid before Parliament and are poised to come into force on 1 October 2026. Once operational, developers must pay the levy as part of the building control process before works can be certified complete or a building occupied, embedding building safety compliance into the lifecycle of new construction.

[edit] Revenue expectations

The Autumn Budget reaffirmed the government’s reliance on this levy to help address unresolved fire safety defects particularly unsafe cladding, without imposing additional burdens on leaseholders or taxpayers. Treasury documents indicate the levy is expected to raise around £3.4 billion over the next decade, supplementing the roughly £5.1 billion already committed via general taxation to tackle the most life-critical remediation work on high-risk buildings. By harnessing contributions from the development sector, policymakers hope to strike a balance between fiscal responsibility and consumer protection.

[edit] Construction impacts

For industry, the timing and mechanics of the levy, now set for the delayed date of late 2026, rather than autumn 2025 were a key point of discussion during the Autumn Budget period. Developers and representative bodies being vocal about the impact of compliance costs, market pressures and the need to build. While the slight delay in implementation gives firms extra time to plan, the cumulative effect of the levy alongside other budgetary measures raises concerns about the viability, especially for smaller builders and initiatives for first-time buyers. Sector groups, including the Home Builders Federation, have argued that additional taxation on top of existing burdens may constrain housing supply further, even as the Budget sets ambitious housing targets supported by programmes such as the £39 billion Social and Affordable Homes Programme, the £16 billion National Housing Bank and the gradual introduction of the UK Pride in Place Programme.

[edit] Remediation realities

Cladding remediation, a central pillar of the building safety agenda, received indirect but consequential support through the Autumn Budget’s funding framework. Although the Budget did not introduce new direct spending lines specifically earmarked for cladding removal, the continued backing of the Building Safety Levy and associated funding mechanisms ensures resources should remain available to complete outstanding works. Government strategy aligns with requirements set out in the Building Safety Act to protect leaseholders from bearing the cost of historic defects, and to hold building owners and responsible developers to account. This has been reflected in wider policy, including the expansion of schemes such as the Cladding Safety Scheme, which funds work on buildings over 11 metres, and strengthened enforcement tools to ensure compliance.

[edit] Committee criticism

The Building Safety Regulator (BSR), established under the Building Safety Act, remains a critical institution in the delivery of these outcomes. However, recent the parliamentary scrutiny and Building Safety Committee discussion with Dame Judith Hackitt highlighted ongoing challenges with approval delays and backlog in gateway processes, which some argue could constrain both remediation and new development. The House of Lords committee has expressed concern over these delays, emphasising that progress on remediation, a central objective of the Budget’s safety investment strategy has been impeded by systemic regulatory bottlenecks.

Despite these implementation challenges, the Autumn Budget positions building safety as a long-term structural priority. By embedding the Building Safety Levy into the fiscal framework and aligning it with the legislative architecture of the Building Safety Act, the government is creating a financial ecosystem designed to accelerate remediation work, protect leaseholders, and uphold fire safety standards in both existing and future housing. As this regime transitions from policy into practice over the next two years, the interplay between fiscal policy, regulatory delivery and industry response will continue to shape the pace of reform and the realisation of safer homes across the UK.

[edit] The budget and construction in brief

The contained several key measures affecting the construction and housebuilding sectors, signalling both opportunities and challenges for the industry: maintaining high levels of public capital investment, protecting long-term infrastructure spending and allocating billions to social and affordable housing programmes that underpin demand for builders and contractors, providing £48 million to boost planning capacity in England to help speed up approvals and support the government’s target of increasing annual housing supply.

However, other cost pressures for the sector, on top of the Building Safety Levy discussed above include above-inflation increases in the National Living Wage and a freeze on the employer National Insurance threshold, which, alongside broader tax rises, have been criticised for tightening margins for construction firms. Industry confidence had been dampened by uncertainty ahead of the Budget, contributing to a slowdown in construction activity, with firms wary of new fiscal burdens and regulatory costs.

Overall, the Autumn Budget’s blend of investment in housing delivery and infrastructure was designed to stimulate construction and help achieve housing goals, but ongoing cost issues and workforce gaps present persistent challenges for housebuilders and the wider built-environment supply chain.

For more info see Construction and the autumn Budget 2025.

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