FMB says £2.7bn of home improvement work is stalled in the South ahead of Budget

The Federation of Master Builders (FMB) has said homeowners across the South of England are putting off £2.7bn of building work a year because they cannot find a builder they trust, as it steps up calls for VAT changes ahead of next week's Budget.

The figure, published on 23 October, is the regional share of research by the FMB and the HomeOwners Alliance. The trade body said the same study found that 49% of homeowners would knock down a wall themselves rather than hire a professional.

Iain Kirtley, FMB Director for the South, said: "The builders I speak to across the region are ready to do this work, train apprentices and upgrade our ageing homes." He added that the Chancellor had the chance next week to unlock that work.

The release is one of a series of regional statements from the FMB in the run-up to the Budget. A day earlier, FMB Scotland said £876m of building work was on hold north of the border, noting that VAT is set at Westminster and so the Budget applies directly to Scottish homeowners.

The VAT argument

The FMB said domestic electricity has been VAT-free since 1 October, but most home improvement work still carries 20% VAT, even where it makes a home warmer. It said the zero rate on energy efficiency measures such as insulation, heat pumps and solar panels runs out next March.

HM Revenue & Customs (HMRC) guidance gives the dates behind both points. Its manual states that installations of energy-saving materials in Great Britain are zero-rated from 1 April 2022 to 31 March 2027, with Northern Ireland covered from 1 May 2023 to the same end date.

The temporary zero rate on domestic electricity in Great Britain has effect from 1 October 2026 to 31 March 2027, according to HMRC. Before the change, VAT on domestic fuel and power was charged at the reduced rate of 5%. The electricity measure does not apply in Northern Ireland, where the rate on qualifying electricity is unchanged.

Charlee Jackson, Director of Jackson Build in Oxford, said: "New builds are zero-rated for VAT, so why not renovation projects? That would help homeowners and level the playing field between builders above and below the VAT threshold."

Gareth Witts, Managing Director of Complete Project Solutions and a new member of the FMB South West area board, said his wish for the Budget was a VAT cut on home improvement work in line with renewables and empty properties.

Gordon Nelson, FMB Scotland Director, said in the Scottish release that the tax system should encourage rather than discourage investment in energy efficiency, and that reforming and simplifying VAT relief on housing improvement work would stimulate demand across all four UK nations.

The Budget asks

The FMB's first request is what it calls a lasting retrofit market: extending VAT relief beyond energy-efficiency improvements, long-term incentives for homeowners to upgrade, and backing for the Warm Homes Plan so builders can invest in skills.

It also wants more council planning capacity, dedicated planning officers for small builders and fewer costs on small sites. On consumer protection it is asking the Government to fund mandatory licensing of domestic building companies, and on skills it wants apprentice paperwork cut for small employers and a UK-wide network of Build Academies funded.

Victoria Collins, Director of Kings Rock Construction Ltd in East Sussex, called for incentives for businesses taking on apprentices, a planning system that lets smaller builders deliver housing, and certainty on business costs.

The regional push follows the FMB's formal Autumn Budget 2026 submission to HM Treasury on 9 September. That document asked for VAT relief to be simplified and extended where housing improvements include energy-efficiency measures, and called for mediation before escalation to an Ombudsman alongside mandatory licensing of domestic building companies.

The research

The underlying study was published by the FMB on 30 April 2026. It found one in five households are put off hiring builders, which the FMB said costs the economy £11.2bn a year. The HomeOwners Alliance published the same finding.

According to the FMB, 82% of UK homeowners would pay more to hire a licensed builder with proven competence, and 68% said mandatory licensing would increase their confidence in builders. Paula Higgins, CEO of HomeOwners Alliance, said that without a licensing scheme too many homeowners would continue to delay essential improvements.

The South release gives no sample size, fieldwork dates or method for the 49% figure or the £2.7bn regional estimate.

The FMB represents around 6,500 vetted SME building companies across the UK, and says every company joining goes through a vetting and inspection process before becoming a Master Builder. Under current HMRC rules, both the energy-saving materials zero rate and the domestic electricity zero rate end on 31 March 2027.