Getting to grips with the major legislative changes brought about by the Building Safety Act 2022 (BSA 2022) has been a significant challenge for the construction industry, particularly against a backdrop of political and economic uncertainty.
More is expected on building safety in 2025, both in terms of further legislation and also guidance from the courts – the developments likely to impact the sector in 2025 are examined below.
Grenfell Tower Inquiry recommendations
The Grenfell Tower Inquiry Phase 2 Report contained 58 recommendations which the government has said it will look at in detail and respond to within six months (by March 2025).
Therefore, there will be further detail in 2025 as to the extent the government plans to take forward these recommendations and this in turn could lead to further legislative change and regulation for the construction industry.
One of the recommendations is that the definition of a higher-risk building should be “urgently” reviewed. The Report concludes that to define a HRB by reference to its height is unsatisfactory: “More relevant is the nature of its use and, in particular, the likely presence of vulnerable people, for whom evacuation in the event of a fire or other emergency would be likely to present difficulty”.
The industry awaits with interest to see whether the scope of buildings which may fall within the definition of a higher-risk building will be expanded or the height threshold changed.
Remediation Acceleration Plan
The government has set out its commitment to increase the pace of remediation of buildings with unsafe cladding in England in its Remediation Acceleration Plan.
The plan also introduces measures to identify further buildings at risk and better protect residents and leaseholders. The government has set a 2029 target for the remediation of all 18m+ buildings with unsafe cladding in a government funded scheme. In addition, as part of this target, by 2029, buildings 11m+ will either have been remediated, have a date for completion “or landlords will be liable for severe penalties”.
The measures announced show a continued government focus to look to the industry to pay to remediate unsafe buildings. The government plans to report on progress in the summer of 2025. Many of the changes will require further legislation that the government has said will be forthcoming “as soon as parliamentary time allows”.
Building Safety Levy
The government intends for the Building Safety Levy to come into effect in Autumn 2025.
This is one of the ways the government is seeking to ensure the real estate industry - rather than leaseholders or the taxpayer - meets building safety expenditure. The government’s aim is to raise around £3.4bn over at least 10 years from the levy. Currently, there is no indication as to what the levy rate will be.
With the scope of the levy being wide, applying to all new residential buildings in England, with certain exceptions, confirmation of the levy rate will be a crucial factor in determining the financial viability of future residential projects. The government has said that: “The levy design will minimise its impacts on housing supply while still raising the required revenue within a reasonable timeframe.”
Further implementation
As well as the Levy, there are other aspects of the BSA 2022 that are yet to be implemented including s.144 providing for new build home warranties to be provided by developers of new homes.
Further regulations will contain the details of the warranties, including what defects will need to be remedied and the insurance requirements. When implemented, it will be a statutory obligation to provide a new-build warranty with a policy term of at least 15 years. Implementation of this aspect of the legislation will hinge primarily around the insurance industry’s appetite to provide a product which fulfils the legislative requirements. The government will need the insurance industry onboard to make products available, so that this part of the legislation can be implemented unless the government decides to be an insurer of last resort which would be very unlikely.
In addition, s.38 of the Building Act 1984 has remained dormant on the statute books despite the BSA providing that liability will be subject to a 15-year limitation period - applying prospectively when the provision is brought into force. Section 38 allows for a claim for compensation for physical damage caused by a breach of the Building Regulations and it was anticipated that this section would be brought into force shortly after the BSA was implemented, but it is not clear when or even if this will now happen.
Fundamental review of Building Regulations guidance
The government has announced that the Building Safety Regulator will undertake a major review of the Approved Documents that provide guidance to the Building Regulations.
The review is set to explore how to make the Approved Documents easier to understand and use, regularly kept up to date with new technologies and practices and for these to be more accessible, particularly by smaller companies.
The first step will be for the BSR to establish a review panel in early 2025.
Building Safety in Wales
In 2025, the Welsh Government is planning to continue to make progress on the implementation of the BSA 2022 in Wales.
The Welsh Government plans to introduce the Building Safety (Wales) Bill in the Summer of 2025.
The Bill will establish a new regime in Wales that will cover the occupation and ongoing management of multi-occupied residential buildings. It will also introduce new fire safety duties for residential buildings and residential parts of mixed-use buildings. Buildings that are in-scope will be required to be registered with the building safety authority by the Principal Accountable Person and statutory duties will be put in place on the Accountable Persons to assess and manage building safety risks.
In addition, in the first quarter of 2025, the Welsh Government plans to launch a consultation on its second phase of the new building control regime in Wales. This will consult on the introduction in Wales of dutyholder roles, gateways, golden thread information, mandatory occurrence reporting and compliance and stop notices. The terminology sounds similar to the regime implemented in England, however, the detail expected in 2025 will be awaited with interest to see how the building safety regime set to be implemented in Wales will diverge from the regime currently operating in England.
The Welsh government has also recently responded to its consultation on amendments to Part B (Fire Safety) of the Building Regulations and associated statutory guidance documents.
The consultation included asking whether there should be a maximum threshold for the provision of a single staircase in residential buildings. The majority of responses were in favour of this, however, the Welsh government response was that it will “undertake further research necessary in the consideration of requirements for stairs in buildings” and that any subsequent proposals will be the subject of further public consultation. This may be another area where the position in England and Wales may differ.
Supreme Court decisions on building safety
At the end of 2024, the Supreme Court considered the appeal of the Court of Appeal decision in URS Corporation Ltd v BDW Trading Ltd (Rev1) [2023] EWCA Civ 189.
The Supreme Court decision is awaited, and this is set to consider a number of important points related to the BSA 2022 and the extended limitation periods for breach of the duties contained in the Defective Premises Act 1972 (DPA). Section 1 of the DPA applies to the carrying out of work in connection with the provision of a dwelling and imposes a duty:
- to carry out the work in a workmanlike/professional manner
- to use proper materials
- to the effect that when the work is complete, the dwelling must be fit for habitation
The BSA 2022 extends the causes of action under the DPA to include work to an existing dwelling, by inserting a new section 2A into the DPA, which has a similar effect to s.1 above.
Claims under s.1 and s.2A of the DPA are subject to a 15-year limitation period applying prospectively for work completed on or after 28 June 2022. Liability under s.1 of the DPA also has a 30-year retrospective limitation period in relation to work completed before 28 June 2022.
One of the questions for the Supreme Court is whether the retrospective extended limitation period provided by the BSA 2022 applies to claims brought before these provisions came into force (28 June 2022) and are the subject of pending proceedings.
In addition, the Supreme Court will consider whether s.1 of the DPA applies only to purchasers of properties or whether commercial developers can also make a claim. The Supreme Court decision on these important issues is expected in 2025.
BSR building control
The practical impact of the building safety legislation will continue to be felt on live projects in 2025, in particular for the new building control regime for higher-risk buildings.
Now that more projects, both new builds as well as remediation schemes, are starting to move to delivery stage and pass through the stages of Gateway 2 and onwards towards Gateway 3, the industry will have to gradually learn to adapt and work with the new regime.
It is apparent from press reports and anecdotally from those submitting projects through Gateway 2 that the Building Safety Regulator has not consistently met the statutory timescales for assessing Gateway 2 applications and indeed has missed the timescale by several weeks. This may in part be due to the new regulator bedding in and a shortage of resources to cope with the current workload, including a backlog of schemes for remediation.
However, the uncertainty as to timescales for proceeding through the Gateways leaves the industry in a difficult position when trying to predict and also contract for the risks involved in the Gateway regime. Managing these risks remains challenging and will be more acute in some projects, for example, student projects where completion and occupation for the student window is critical.
During 2025, the BSR may continue to improve its processes and allocate additional resources so that applications can be assessed within the statutory timescales. However, developers, contractors and forward funders and investors will have to continue to navigate the path through the contractual arrangements that deal with the risk of delay and the costs involved in passing through the Gateway regime at Gateway 2 and Gateway 3 and work out who is best placed to manage or take that risk.
It seems likely, and there are already signs, that some of this risk will be mitigated by early engagement between developers and contractors working towards Gateway 2 on a more collaborative basis before contracting for the extent of the risk and that there will be an increased use of pre-construction agreements, whether formally or informally, to work towards satisfactory launch of projects into Gateway 2 and onwards to site.
The industry will need to continue to monitor the developments in relation to building safety both in terms of the provisions that have been implemented, continuing to adapt to the impact of these on projects, and also closely monitor the further regulation and guidance that may be on the horizon.
Disclaimer
This information is for general information purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. Please contact us for specific advice on your circumstances. © Shoosmiths LLP 2025.