Future Homes Standards – What now for the future of house building?

The Future Homes Standard (FHS) is the 2026 update to Part L (Conservation of Fuel and Power) of the Building Regulations for England.  It establishes a new benchmark for low-carbon, future-proofed housing and forms part of the UK’s commitment to reaching net zero by 2050. In essence, it requires all new homes to be built so that they produce significantly less carbon emissions than homes built to the 2013 standards, to be “zero-carbon ready” and “future proof”.  The effect of the FHS is to mandate the use of heat pumps, solar PV, and to require significant improvements to building fabric and ventilation.

The regulations were laid before Parliament on 24 March 2026 and will come into force on 24 March 2027.  The 12-month transition period should be noted:

• Schemes with applications submitted before 24 March 2027 can build to Part L 2021 if commenced before 24 March 2028
• Schemes submitted on or after 24 March 2027 must comply with the FHS immediately
• After the expiry of the transitional period on 24 March 2028, all new homes must comply with the FHS regardless of when they were registered
• The transitional arrangements operate on an individual building basis, not site-wide, therefore, homes on the same development may fall under different provisions

Key points:

• New homes must produce at least 75% less carbon emissions when compared to homes built to the 2013 Part L baseline.
• Heat pumps will be the primary heating technology for the vast majority of new homes
• Solar PVs will be required on most roofs
• Increased standards in building fabric to address heat loss through walls, windows, roofs, and openings
• Ventilation will be a critical element as a consequence of improved airtightness.

Costs/Savings/Benefits:

Building to the FHS will have implications on build costs.  The government’s own impact assessment recognises “..there will be a commensurate increase in build costs to achieve these higher standards” and that “the “estimated average increase in capital costs, weighted for an assumed build mix, is £4,350 per dwelling [weighted average, 2025 prices]. This average capital cost uplift varies by dwelling type, ranging from £5,690 per mid-terrace dwelling to £1,550 per dwelling in a high-rise flat block (>18m)”.

However, for individual residents, a FHS compliant home could see savings in energy bills estimated to be between £500 to £1,000 per year and this is explicitly recognised by the government consultation outcome document which states “…higher standards will increase comfort and reduce bills”.

For housing associations and the like, a FHS compliant housing stock could translate to housing stock that has a greater life span, requires less future renovation and repairs, and which holds its value for longer.

Challenges and Viability:

The government stated aim of building 1.5M homes by the end of this parliament is well documented, underscored by the Housing Secretary, Steve Reed’s, mantra of “Build, baby Build” but what impact could the FHS have on meeting the target?

The building industry is already beset by skills and labour shortages, among other pressures.  Building FHS compliant homes will require certain skillsets – skillsets that are already in short supply, and in addition, some entirely new skillsets.  This will surely only add more pressure to an already burdened sector.

In addition, there are also viability concerns. Developers are already dealing with increasing costs such as energy, raw materials and interest rates, in additional to labour shortages, an ageing labour force and wage inflation.  Adding, therefore, an extra £4,350 build cost per dwelling (particularly in the case of affordable homes) may tip some schemes that were viable over: and if that is the case, hitting the target of 1.5M homes would be even harder.

Conclusion:

The FHS is long awaited – 2 years, in fact, but the building industry has long recognised the direction of travel and so they have already started work in readiness for the FHS.  Nevertheless, now published, it provides clarity and certainty. However, despite the building industry’s foresight in putting in place measures in readiness for the FHS, what impact FHS will have on viability and the pace of house building will remain to be seen…maybe not until 2028 when all new homes must be built to FHS.

However, it is undeniable that homes built to a higher energy standard is the right direction of travel for all stakeholders.

if you have any questions about the topics raises in this article, please get in touch with our expert team.