Horizon Scanning for Construction in England and Wales 2026

General outlook for construction

The next year poses ambitious plans for housing, infrastructure and building safety, which have received support from various Government initiatives, ranging from strategic planning and financial support.

Data centres remain a key area of growth, and tackling their associated challenges continues to be a priority in 2026. These include securing access to and connections with essential utilities, obtaining necessary consents, and managing the environmental impact of the significant power and water required to operate them.

Court decisions

• JCT and termination - In January 2026, we received the Supreme Court’s decision in the appeal of Providence Building Services Ltd v Hexagon Housing Association Ltd ¹. This case determined that a Contractor under a JCT Design and Build Contract is only entitled to terminate its employment under clause 8.9.4 where the Employer has repeated a specified default, and the original default remains unremedied. This is welcome news to Employers, who otherwise may have been on the receiving end of a notice of termination for repeated late payments.
• HGCRA and definition of ‘residential occupier’ - The Supreme Court has granted permission to appeal RBH Building Contractors Ltd v James and another², in which an Employer successfully resisted summary enforcement of an adjudicator’s decision based on what constituted a ‘residential occupier’ within the meaning of s.106 Housing Grants, Construction and Regeneration Act 1996. The case also considered payment applications and adjudicators’ fees.

It is expected that there will be an uptake in the number of cases relying on the Defective Premises Act 1972 (the DPA), due to the extended limitation periods offered under the Building Safety Act 2022, and consequently further clarity on how the provisions of the DPA operate.

Procedural guidance on Building Safety

During 2026 it is likely that there will be more court guidance on BSA applications for remediation orders and remediation contribution orders in the First-tier Tribunal (FTT) and information orders and building liability orders in the Technology and Construction Court (TCC). A working group made up of barristers, solicitors and members of the judiciary made recommendations in June 2025 to update the Technology and Construction Court Guide, with the aim of providing consistency in approach to building safety issues across the TCC and FTT.

Mandatory second staircase

From 30 September 2026, it will be mandatory for all new buildings over 18m to have a second staircase. It is likely that this change will be embraced early by designers to ensure the property’s long term market value.

Building Safety Levy

The Building Safety Levy is expected to come into force on 1 October 2026. The draft Building Safety (England) Regulations 2025 propose that the levy will apply to building control applications for new residential developments providing at least 10 dwellings or 30 bedspaces in purpose-built student accommodations. The levy will be based on chargeable floorspace and applicable local rates and will provide financial assistance for improving building safety in defective buildings.

Building Safety in Wales

Changes to the building safety regime come into force on 1 July 2026 and apply to all applicable building work in Wales that commences after that date (with transitional arrangements in place where building work has commenced, or the initial notice has been accepted by the local authority or full plans have been lodged before that date).

The Building (Higher-Risk Buildings Procedures) (Wales) Regulations 2025 apply to higher -risk building work in Wales and largely follow the English regime, except for the following main differences:

• the application process will be governed by the building control authority, rather than the Building Safety Regulator;
• appeals against the building control authority are made to:
• the magistrates court (rather than the First-tier tribunal) against a rejection notice that the work is to be regarded as commenced, and (Reg 9 and 17); or
• the Welsh Ministers (rather than the Secretary of State) against other building control approval decisions; and
• such appeals must be made within 15 working days (rather than 21 relevant days) from the day the authority gives the rejection notice or the decision is notified.

This should be considered in the context that the definition of “higher-risk building” is different in Wales, as set out in The Building Safety (Description of Higher-Risk Building) (Design and Construction Phase) (Wales) Regulations 2023 in that it requires at least one residential unit (as opposed to two in England) and also includes children’s homes.

A similar dutyholder regime is also proposed under The Buildings etc. (Amendment) (No 2) (Wales) Regulations 2025, which applies to all building work under the Building Regulations 2010 in Wales. The procedures follow the English regime, except that domestic clients can assign the duties of the Principal Contractor and Principal Designer to themselves or any other person.

Construction Products

The Construction Products (Amendment) Regulations 2025 came into force on 8 January 2026. These regulations amend the harmonised conditions for marketing construction products, ensuring compliance with updated standards.

Further reform is expected following the Government’s consultation on the Construction Products Reform Green Paper, which was announced in February 2025 and closed in May 2025. Proposals include bringing all construction products within the general product safety regime; enhanced regulatory, surveillance and enforcement powers; development of a new single Construction Products Regulator and criminal and civil penalties that engage in misleading practices or neglect their responsibilities regarding product safety.

Electricity network connections reform

The Planning and Infrastructure Act received royal asset on 18 December 2025 and introduces reforms for electricity network connection to improve efficiency and align with Ofgem/NESO grid connection reforms. In summary these amend electricity licences and related documents; amend qualifying connection agreements, impose a mandatory centralised approach to providing bill discounts to communities closest to new/significantly upgraded electricity transmission infrastructure and extending the commissioning period for offshore electricity transmission system.

Standard Forms

It is expected that FIDIC will introduce a climate change clause in 2026 (similar to NEC’s X29, which was published in 2022) to set objectives, obligations, incentives and damages according to a separate Schedule of Carbon Emissions. FIDIC also plans to introduce carbon management guidance for the lifecycle of the asset. FIDIC’s standard form contract for offshore wind projects is also expected to be published in 2026.

Conclusion

Legal updates in 2026 tread familiar ground, with a focus on consolidation and alignment. This is welcome news after the big legislative developments arising from the Building Safety Act 2022, which continues to be a fruitful source of legal discussion.

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[1] [2026] UKSC 1
[2] [2025] EWHC 2005 (TCC)