The UK Government has announced new measures aimed at rogue builders, including a voluntary Approved Code for home-improvement businesses and a new milestone-payment system designed to reduce the risk of homeowners handing over large sums before work is completed.
The measures, announced on 28 August 2026, are being presented as a crackdown on so-called cowboy builders. But the practical position is more complicated: neither the Approved Code nor Trusted Payments creates a compulsory builder licence, and businesses that choose not to participate can continue trading legally.
The Government's new measures aim to give homeowners greater protection when hiring builders through an Approved Code and milestone-based Trusted Payments system. Editorial illustration: London Construction Magazine.
Key Takeaway: Homeowners are being given a new way to identify participating traders and link payments to completed stages of work, while reputable builders may gain stronger evidence that customer funds are available. But the system remains voluntary, meaning the builders most likely to avoid scrutiny are not legally required to join.
While the new measures have been presented as a crackdown that could drive rogue builders out of the market, London Construction Magazine analysis shows that voluntary participation leads to a much narrower outcome: stronger protection where homeowners and legitimate traders choose to use the system, but no new legal barrier preventing non-members from continuing to trade.
Cowboy Builder Crackdown 2026: By the Numbers
| Measure | Latest Position | What It Means |
|---|---|---|
| Home-improvement problems | More than 1 in 4 adults undertaking recent work | Consumer problems remain widespread |
| People facing extra costs after problems | 37% | Problems frequently create additional financial loss |
| Typical additional cost cited | Around £750 | Consumer harm can quickly exceed the original saving from a cheap quotation |
| Home and garden consumer detriment | £10.3bn | Broad detriment including losses, overpricing and unfair practices — not fraud alone |
| Trusted Payments launch | Early September 2026 | Milestone payment system begins rollout |
| Trader access target | 100,000+ by end of September | Potentially rapid national reach |
| Approved Code | Initial launch September; fully live by December | New home-improvement code sits within an existing CTSI framework |
| Compulsory? | No | Non-participating general builders can still trade legally |
The £10.3bn figure should not be described as money lost specifically to cowboy builders. It comes from wider consumer-detriment research covering home and garden maintenance, repair and related services, including poor outcomes, excessive costs and unfair practices.
What Has the Government Actually Changed?
The announcement introduces two separate mechanisms for the home-improvement market. The first is a new home-improvement Approved Code. It is being developed by the Chartered Trading Standards Institute and the Furniture and Home Improvement Ombudsman within the wider Approved Code Scheme framework. Businesses participating in the code will be expected to demonstrate higher standards around customer service, transparency and dispute resolution. Consumers should then be able to identify businesses operating within the scheme rather than relying solely on advertising, online reviews or word-of-mouth recommendations.
But the Approved Code is not a construction licence, and it is not a government register that every builder must join. The broader Approved Code Scheme already operates across multiple consumer sectors. What is new is the creation of a dedicated home-improvement code intended to sit within that existing structure.
The second measure is Trusted Payments. This is intended to change the way money moves during home-improvement projects by linking payments to agreed stages rather than relying principally on large upfront transfers followed by informal requests for further money. The distinction matters because many disputes begin not with technical building failure but with uncertainty over scope, variations, deposits, stage completion and whether money should be released.
Trusted Payments: How the Money Actually Moves
Trusted Payments is not a government banking service. The platform is operated by Trusted Payments Limited, a private company incorporated in April 2022 under company number 14045911. The government is supporting the system, but it does not own or operate the company. The published model allows the homeowner and tradesperson to agree the scope, price and staged completion milestones before work begins. Payments are then processed through Stripe, while Trusted Payments states that it is not itself a bank, is not FCA-authorised and does not hold client money.
The homeowner funds an agreed stage, the contractor completes the work and submits evidence such as photographs, notes and documents, and payment is released following approval. A 24-hour review period is also built into the payment process. Retention is described separately as being held through an independent trust arrangement connected with the Ombudsman. This is why describing the entire system simply as escrow would be misleading. It is more accurately a milestone-payment system with independent retention, dispute resolution and insurance-backed warranty arrangements.
One detail still requires caution. The compiled platform material contains different descriptions of the warranty period: some material references protection during the project plus two years after completion, while other wording refers to a one-year insurance-backed warranty. Homeowners and contractors should therefore check the final terms applicable to their individual project rather than assume a warranty period from headline marketing alone. The detailed research also identifies a published project charge of around £35, with a lower charge for smaller projects, alongside payment-processing fees passed to the trade. These commercial terms should again be checked when the platform formally launches, as launch-stage pricing can change.
What Does This Mean for a £50,000 Home Extension?
Consider a £50,000 extension. Instead of transferring a substantial percentage of the contract value to a builder and then relying on informal payment requests, the homeowner and contractor could agree a staged structure covering mobilisation, foundations, structure, making the building watertight, first fix, second fix, practical completion and final snagging. An illustrative arrangement might allocate 10% to mobilisation, 15% to foundations, 20% to structure, 15% to watertight completion, 15% to first fix, 15% to second fix, 5% to practical completion and a final 5% retained pending snagging.
Important: These percentages are an illustration only. They are not a mandatory Trusted Payments schedule. Actual milestones are agreed between the parties.
For the homeowner, the attraction is straightforward: less money is exposed before progress can be inspected, variations can be documented and a formal record exists if something later goes wrong. For the builder, the potential benefit is equally important. The contractor can have evidence that the client's money is committed before undertaking the relevant work, reducing the risk of finishing a stage only to discover that the homeowner cannot or will not pay.
There is, however, a practical construction problem that policy announcements rarely acknowledge: someone still has to buy the materials. A legitimate SME contractor may need to pay for bespoke windows, steelwork, kitchens, sanitaryware, plant hire and subcontractor mobilisation weeks before those items are installed. Current UK construction material-price movements make those working-capital requirements particularly important.
The platform appears capable of accommodating mobilisation or deposit stages, meaning the concept is not simply “no payment until the work is finished”. But the detailed mechanics for supplier-direct payments and bespoke material procurement are not fully explained in the launch material. That question becomes even more relevant for retrofit and energy-efficiency work, where specialist equipment can account for a significant proportion of the contract value. Our London retrofit contractor analysis shows how technically intensive these packages can become.
The Friction Layer: Can a Voluntary Code Really Stop Cowboy Builders?
This is where the government's political ambition and the mechanics of the scheme separate. A reputable contractor has clear reasons to participate: credibility, a recognised consumer-protection route, evidence that client funds are available, formal project documentation and the ability to distinguish itself from traders competing primarily on price. A genuinely rogue operator has much less incentive.
Because participation remains voluntary, a builder can choose not to join the Approved Code, choose not to use Trusted Payments and continue advertising and undertaking general building work, subject to the same underlying consumer, planning and building-regulation law that applied before 28 August. The UK still has no general statutory builder licence. Specific activities are regulated — gas work requires Gas Safe registration and certain electrical work must meet building-control and certification requirements — but there is no national competence licence that must be held simply to describe a business as a general builder.
The Federation of Master Builders has therefore welcomed the direction of the announcement while continuing to argue that voluntary schemes cannot replace statutory licensing. The Chartered Trading Standards Institute has also welcomed the measures while supporting stronger regulation and enforcement. Other consumer and industry organisations have been more supportive of the immediate protections, particularly the use of independent dispute resolution and a clearer payment structure. The National Federation of Builders has nevertheless raised the separate question of duplication with existing industry codes and accreditation schemes.
That leads to another unresolved issue: TrustMark already exists. TrustMark describes itself as the UK Government-endorsed quality scheme for home-improvement work, and Trusted Payments already works with TrustMark and other vetted membership organisations.
The new Approved Code is a separate CTSI/FHIO initiative focused on customer service, transparency and redress. The launch material does not yet clearly establish whether the two systems will eventually integrate, remain parallel or require some businesses to demonstrate compliance with overlapping schemes. The same caution applies when connecting the announcement to wider retrofit reforms. Although TrustMark already plays an important role in energy-efficiency installation, the August measures have not been formally presented as a replacement for the separate consumer-protection regime governing retrofit.
What Protection Do Homeowners Already Have?
The announcement does not create consumer protection from nothing. Homeowners already have rights under the Consumer Rights Act 2015, access to Trading Standards and Citizens Advice, civil remedies through the courts, Alternative Dispute Resolution in participating schemes and card-payment protections such as Section 75 where the statutory conditions are met. Building Regulations and specialist competence schemes also govern particular categories of technical work.
What the new arrangements add is different: a practical mechanism for controlling payment during the project, clearer documentation, an integrated dispute route and a more visible badge for businesses choosing to operate within an approved consumer code. For homeowners considering a larger project, the difference between construction cost and the wider project budget also remains important. Our UK Construction Costs 2026 analysis explains why headline £/m² figures are only one part of what ultimately needs to be funded.
What Happens Next?
Trusted Payments is expected to begin operating in early September 2026, with more than 100,000 traders expected to be able to access the system by the end of the month. The first businesses operating under the home-improvement Approved Code are expected around the end of September, with the code due to be fully live by December.
The critical numbers to watch are therefore not government announcements but actual adoption: how many reputable builders participate, how many homeowners choose milestone payments, how frequently disputes enter the Ombudsman process and whether consumers begin treating Approved Code membership as a meaningful factor when choosing a contractor.
If adoption becomes widespread, non-participating contractors may face commercial pressure even without a statutory requirement. If take-up remains limited, the government's wider review of consumer enforcement is likely to face renewed calls for compulsory builder licensing. The full contractor implications, sequencing risks and mitigation strategies are included in today’s London Construction Magazine briefing.
Quick Answers
Is the Approved Code compulsory?
No. Participation is voluntary and non-members can continue trading legally.
Is Trusted Payments a government app?
No. It is operated by Trusted Payments Limited, a private company. The government is supporting the initiative but does not own or operate the platform.
Is Trusted Payments an escrow service?
The published material does not support describing the whole arrangement as traditional escrow. Payments are processed through Stripe and released against agreed milestones, while retention is described separately as being held through an independent trust arrangement.
Can builders still ask for a deposit?
Yes. The system can accommodate agreed mobilisation or deposit stages. What matters is that the payment structure is documented and linked to the project.
Is the UK introducing a builder licence?
No. There remains no general statutory licence required to operate as a general builder.
Can a builder simply refuse to join?
Yes. That is the central limitation of the current policy.
Evidence-Based Summary
The government's 28 August 2026 cowboy-builder measures introduce a voluntary home-improvement Approved Code and support for a private milestone-payment platform called Trusted Payments. The system could materially improve protection for homeowners who use participating traders and could give reputable contractors better payment certainty, documentation and market differentiation. However, it does not create compulsory builder licensing or prevent non-participating businesses from continuing to trade. The £10.3bn figure cited alongside the announcement represents wider consumer detriment in home and garden maintenance services, not losses attributable solely to fraud or rogue builders, making actual scheme adoption and enforcement more important measures of success than the headline political claims.
Source Context & Editorial Note
This analysis was prepared using information available on 28 August 2026. The principal policy source is the UK Government announcement Government steps in to protect families from cowboy builders and aggressive bailiffs. Payment mechanics were checked against the TrustMark Trusted Payments information and Trusted Payments' published platform material. The platform is privately operated; Stripe is identified as the payment processor, while the published material separately describes independent retention and Ombudsman arrangements.
Approved Code context was drawn from the Chartered Trading Standards Institute Approved Code Scheme and material concerning the new Furniture and Home Improvement Ombudsman code. Consumer-impact figures were assessed against Citizens Advice research and the 2024 Consumer Detriment Survey rather than being treated as fraud statistics. Several launch-stage details remain unresolved or are described inconsistently across published material, including final warranty wording, detailed retention arrangements, some fees, supplier-direct payment mechanics and the precise long-term relationship between the Approved Code and TrustMark. These should be checked against final scheme terms as rollout progresses.
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Expert Verification & Authorship: Mihai Chelmus
Founder, London Construction Magazine | Construction Testing & Investigation Specialist |
