For developers, investors and landowners, this establishes a new baseline for performance, with immediate implications for schemes in planning and early delivery.
Key changes
- Low carbon heating required
New homes must be designed with low carbon heating systems (e.g. heat pumps or heat networks), effectively removing gas and oil boilers from new-build design.
- On-site renewable electricity generation
A new functional requirement mandates on-site renewable generation. In practice, this will usually be delivered through solar PV, subject to site constraints (with the notional buildings including PVs equivalent to 40% of the building’s foundation area).
- Improved fabric and building performance
Strengthened standards for insulation, airtightness, ventilation and overheating mitigation apply, alongside an increased focus on real-world performance. While backstop (minimum) U-values have remained unchanged since the 2021 uplift, improved performance will be driven by enhanced specifications embedded in the notional dwelling under SAP and the forthcoming Home Energy Model.
However, the whole-building compliance approach allows trade-offs between fabric and systems. In practice, higher heat demand arising from weaker fabric performance can be offset through more efficient heating systems (e.g. heat pumps) and additional on-site generation via photovoltaics.
This “flexible” approach risks embedding higher space heating demand in the building fabric, relying on low-carbon energy supply to achieve compliance rather than reducing demand first.
- Transition to new performance metrics
SAP will continue initially, with the Home Energy Model (HEM) introduced alongside it before becoming the primary methodology.
Timing and transitional arrangements
- New regulations come into force: 24 March 2027
- Transition period ends: March 2028
Schemes can still proceed under current standards where applications are submitted before March 2027 and construction commences before March 2028 (subject to specific provisions, including for higher-risk buildings).
This creates a clear distinction across the development pipeline, with a likely two-speed market emerging over the next two years.
Implications for projects
- Design and specification
Early-stage design will need to integrate fabric, heating, ventilation and energy systems more closely. On-site generation and space for plant will need to be considered from the outset.
- Viability and cost
While capital costs may increase, operational savings are expected but not guaranteed, with outcomes dependent on electricity pricing. ESG considerations are also likely to become more prominent in value assessments.
- Programme and delivery risk
Skills availability (particularly for heat pump installation), supply chain readiness and installation quality will be key constraints.
- Performance in use
Greater emphasis on commissioning, certification and homeowner information reflects a shift toward operational performance, not just compliance. While the Standard strengthens commissioning and performance in use, a full framework for measuring and addressing the performance gap, including in-use monitoring, is yet to be defined.
Key considerations
- While fabric standards have improved, the Standard stops short of a truly fabric-first approach, instead relying on a balanced approach between building performance and low carbon technologies. This flexibility supports delivery, but raises questions about long-term efficiency and consistency of outcomes.
This raises calls from the UKGBC, among others, for this to be the “…start of the journey, not the end. Government must maintain this momentum and set out a clear timetable for the next iteration of building regulations. Many developers are already building to higher standards, and are eager to help ensure the next update delivers genuinely future-ready homes by the early 2030s…” Simon McWhirter, Chief Executive of the UK Green Building Council
- Electricity pricing and wider energy policy will influence the success of electrified heating.
- New build standards address only part of the challenge, retrofit and embodied carbon will remain critical areas of focus.
Red Flags
The Regulatory Policy Committee (RPC) has issued a “red” (not fit for purpose) rating on the Government’s impact assessment for the Future Buildings Standard, meaning that the evidence base underpinning the policy, particularly around option selection, SME impacts (i.e. smaller businesses across the construction and development supply chain) and cost-benefit analysis, is considered inadequate. The RPC also highlights that the impact assessment relies on insufficiently evidenced claims regarding impacts on competition, innovation, and wider economic effects, including projected energy bill savings for occupants, undermining confidence in the robustness of those conclusions.
Importantly, this does not affect the validity or implementation of the legislation. However, the weak analytical justification increases the likelihood of ongoing scrutiny, refinement and potential future adjustments, particularly in areas such as small developer impacts and technical assumptions, so while developers should proceed on the basis that the new non-domestic standards will apply, there remains a degree of policy risk and evolution over time.
What this means
The Future Homes Standard provides a clear framework but also raises expectations.
Over the coming years, performance, in terms of energy use, cost and comfort, will become an increasingly important factor in how homes are designed, delivered and valued.
The immediate priority is ensuring projects are aligned with the new requirements and that delivery risks are understood early.
