Model for Mandatory Licensing of Building Companies Unveiled

A MODEL for licensing building companies is being launched in the House of Lords by the Federation of Master Builders (FMB).

The FMB’s “Licence to Build” campaign model sets out a framework for licensing domestic builders.

After a decade long campaign and cross-industry collaboration, licensing is also backed by the public – with 81% supporting proposals for a mandatory licensing scheme for residential builders.

How Would It Work?

Under the framework, licensing would be mandatory for all paid-for domestic construction work by contractors.

Funded by fees charged according to a building firm’s size and risk level, initial and renewal checks are built in. After the first and third years, further checks are based on risk factors or significant changes in management. Failure to meet standards lead to appeals, sanctions, or loss of licence.

• A single UK licensing authority acts as the main point of contact. This body provides clear guidance and signposting for firms seeking to become licensed.
• Firms apply for a licence via an approved Scheme Provider. The central licensing body’s website helps firms identify the right provider for their needs.
• These providers are responsible for assessing applicants against national standards.

On application, firms may receive a provisional licence with sporadic field checks will assess competence and quality before a full licence is granted.

Four Pillars of Licensing

To obtain and retain a licence, firms must maintain standards in four key areas:

• Health and safety
• Competence (technical skills, management, regulatory understanding)
• Quality management
• Dispute resolution and customer service

Firms must also sign a Considerate Contractor Declaration, committing to best practice in worker wellbeing, community relations, and environmental impact.

Likely Costs

The 2018 Licence to Build report drew on historic data on Corgi running costs (equating to £113 per operative) and estimated that if each of 1 million UK construction firms paid £150 for a licence, this would equate to £150 million of income. Business Population Estimates for 2024 point to a smaller number of construction firms (870,185), meaning each firm would need to pay £172 to equate to the same level of income, before accounting for 28% inflation between 2018 and February 2025.

Why Trust a Builder?

FMB CEO Brian Berry said: “You wouldn’t trust a driver without a licence-so why trust a builder? We have seen first-hand the devastating impact rogue builders can have on innocent homeowners. Too many families have suffered financial loss, emotional distress, and even unsafe living conditions at the hands of unqualified and unscrupulous operators.

“Our licensing model is the missing link to drive up standards, protect homeowners, and ensure that only competent, qualified building firms are allowed to build and improve our homes.

“This is about restoring trust and professionalism to our industry, supporting reputable builders, and finally giving consumers the confidence and protection they deserve. We sincerely hope that the Government will put protecting the consumer at the top of its agenda. Now is the time for action to deliver the change the public and industry need.”

Mark Garnier, Conservative MP for Wyre Forest has been at the forefront of parliamentary efforts to introduce a licensing system for domestic builders through his Private Members’ Bill, the Domestic Building Works (Consumer Protection) Bill.

The Bill was first introduced in the House of Commons in 2021 and Mark Garnier reintroduced a similar version in the 2024-25 session, with its first reading last year and its second reading scheduled for 13 June 2025. The MP said he has “more hope” for the Bill under the new Government.

Why Licensing Matters

Quality Homes

The introduction of a mandatory licensing system for domestic builders is not only about protecting consumers and rooting out rogue traders, it is also crucial for meeting the Government’s housing targets of delivering 1.5 million new homes over the next 5 years.

Ensuring that only competent, qualified builders are allowed to operate will help deliver homes that are safe, high-quality, and built to last-giving homeowners confidence and supporting the delivery of these new homes.

Level Playing Field

Furthermore, a robust licensing system will also help create a level playing field for reputable builders, drive up industry standards, and support economic growth.

The Grenfell Tower Inquiry Phase 2 report recommended the introduction of a licensing scheme, operated by the construction regulator, for principal contractors to ensure buildings safety’ and that they meet Building Regulations.

What’s Next?

UK Government and industry must develop a workable licensing scheme while continuing plans for a single construction regulator to serve as a UK licensing body.

Stakeholders need to reach agreement on geographical license operation across the Home Nations, alongside identifying scheme providers and establishing operational requirements including technical standards, license approval processes, and compliance inspections.

A comprehensive assessment of costs and revenue is essential to create a self-sustaining industry-funded model.

Next will be development and implementation of legislation.

The final step requires staged implementation beginning with pilot programs supported by existing construction competence bodies, with a built-in review and evaluation period before full-scale rollout.

The FMB says is committed to raising quality in the construction industry and members have to pass a professional vetting and independent inspection process. The FMB offers a free service to consumers called ‘Find a Builder’.

Roofing Today Support

Editor’s Note: Roofing Today fully supports a licensing scheme that encompasses the roofing industry.

Dr Claire Griffiths, Roofing Today’s editor, comments: “Nearly every week we hear of ‘cowboy traders’ posing as roofers, ripping off consumers and delivering substandard roofing work.

“This not only creates a poor public perception of UK roofing to the detriment of the vast majority of roofers who are professionals striving to deliver excellent customer service, it also leaves a trail of destruction in their wake at the cost of, often very vulnerable, home owners and occupiers.”

“A licensing scheme will stop the cowboys going round undercutting the professionals, raise roofing quality and give us an industry that more people will want to work in.”

>> Read more about the FMB in the news