How the Future Homes Standard Will Change Trades Business Models featured image
Business & Operations

How the Future Homes Standard Will Change Trades Business Models

The Future Homes Standard lands in 2027 with mandatory heat pumps, MVHR, and tighter fabric standards for all new builds. Here is what it means for your revenue mix, skills pipeline, and five-year business plan.

Ettan Bazil
Written by
Ettan Bazil
Founder & CEO (Tech / PropTech)
About Ettan Early Life and Career Ettan Bazil began his professional journey as a gas engineer and plumber, gaining hands-on experience working directly with households, landlords and property managers. His early trade background shaped his understanding of real-world operational challenges, from emergency repairs to workforce shortages and inefficiencies in the maintenance sector. In 2016, he founded Elite Heating & Plumbing, growing it into a successful business employing multiple engineers and apprentices.
19 hrs ago 15 min read Comments

Quick Answer

The Future Homes Standard comes into force on 24 March 2027 and applies to every new-build home in England. Gas and oil boilers are banned from new builds. Heat pumps, MVHR, solar PV, and fabric-first construction become the baseline. If you are a heating engineer, plumber, builder, or electrician working on new-build projects, your revenue mix is about to shift. The trades businesses that retrain now will pick up the work. The ones that wait will watch it go to someone else.

75%
Carbon reduction vs 2013 baseline required by FHS
190,600
New-build homes per year in England (2024)
~10,000
MCS-certified heat pump installers in the UK today
33,700
FTE heat pump installers needed to meet government targets
£7,500
Boiler Upgrade Scheme grant per heat pump installation

What the Future Homes Standard actually requires

New-build housing development with modern low-carbon construction features
New-build developments from 2027 onwards must meet far tighter energy and ventilation standards

The Future Homes Standard (FHS) is the biggest change to Part L and Part F of the Building Regulations since they were introduced. The Approved Documents were published on 24 March 2026 and come into force exactly one year later. Every new-build home in England with a building control application submitted from 24 March 2027 must comply.

At its core, the standard demands a 75% reduction in carbon emissions compared to the 2013 baseline. That single number drives everything else. To hit it, homes must use low-carbon heating (read: heat pumps), mechanical ventilation with heat recovery (MVHR), improved fabric performance, and solar PV as standard.

The 2021 Part L uplift was the stepping stone. It required a 31% carbon reduction. The FHS more than doubles that target. If you thought the 2021 changes were disruptive, this is on a different scale.

What replaces SAP? The Standard Assessment Procedure (SAP) is being replaced by the Home Energy Model (HEM). There will be a dual-running period where both SAP 10 and HEM are accepted, but HEM will eventually become the sole compliance route. HEM is more granular, factoring in real-world occupancy patterns and climate data.

The key technical requirements in plain terms:

  • No gas or oil boilers in new-build homes. Low-carbon heating systems (primarily air source or ground source heat pumps) become the default.
  • MVHR mandatory in most new-build homes to meet the tighter airtightness and ventilation requirements.
  • Airtightness tightened to a maximum of 3 m³/(h.m²) at 50 Pa, down from 8 m³ under Part L 2021.
  • Solar PV covering 40% of ground floor area becomes a standard requirement.
  • Wastewater heat recovery (WWHR) added as a new requirement for the first time.
  • Improved U-values for walls, floors, roofs, and windows, pushing fabric performance well beyond current standards.

Key dates: the FHS timeline

Calendar showing key regulatory dates marked in sequence
The transitional period gives builders until March 2028 to complete projects started under current rules

June 2022

Part L 2021 takes effect, requiring 31% carbon reduction in new builds. This was the "stepping stone" to the FHS.

24 March 2026

FHS Approved Documents published. One-year notice period begins. This is when the detailed technical specifications become available.

24 March 2027

FHS comes into force. All new building control applications from this date must comply with the new standard.

24 March 2028

Transitional period ends. Projects that were started under the old rules must be completed by this date or switch to FHS compliance.

That transitional period matters. If you have new-build projects with building control applications submitted before March 2027, you have until March 2028 to complete them under the current rules. After that, everything must comply.

For most trades businesses, the practical shift starts now. Training courses have lead times. MCS certification takes months. And the developers you work for are already specifying FHS-compliant systems on projects due to start in late 2026.

How your revenue mix will change

Heating engineer examining a modern air source heat pump unit beside a new-build property
The shift from gas boilers to heat pumps will reshape heating businesses over the next three to five years

I started my career as a gas and heating engineer. I know what a stable new-build pipeline looks like, and I know what happens when regulations shift the work underneath you. The FHS is doing exactly that.

For heating engineers, the maths is straightforward. Around 190,600 new homes are built in England each year. Under the FHS, every single one needs a low-carbon heating system instead of a gas boiler. That is 190,600 heat pump installations per year that did not exist as a market five years ago.

The flip side is equally clear. New-build gas boiler installations will drop to zero. If new-build work makes up a significant portion of your revenue, you have a choice: retrain for heat pumps, or watch that revenue stream disappear.

But this is not just about heating. The FHS creates new revenue across multiple trades:

  • Plumbers pick up wastewater heat recovery (WWHR) system installations, a product category that barely existed in UK domestic work until now.
  • Electricians gain solar PV installation work on every new build, plus the wiring for heat pump systems and smart controls.
  • Ventilation specialists (or heating engineers who retrain) get MVHR design, installation, and commissioning work on most new builds.
  • Builders and general contractors need to upskill on fabric-first construction, airtightness testing, and thermal bridging details.

The businesses that add these capabilities to their offering now will be the ones developers call first. It is that simple.

Heat pumps: the new baseline for heating work

Heat pump sales in the UK hit 125,037 units in 2025, a 27% increase year on year. That number will accelerate sharply once the FHS takes effect. The government target is 450,000 heat pump installations per year by 2030, though most industry observers think 300,000 is more realistic.

For heating engineers, the transition is not as dramatic as it sounds. You already understand hydraulic systems, heat distribution, and system design. The core skill set transfers. What is different is the design methodology. Heat pumps operate at lower flow temperatures than gas boilers, so system sizing, radiator selection, and pipework design all need rethinking.

MCS certification is the gateway To install heat pumps that qualify for the Boiler Upgrade Scheme (BUS) grant of £7,500, you need to work for an MCS-certified company. The certification covers your business, not just you individually. Budget £1,500 to £3,000 for the initial assessment and annual fees. The Heat Training Grant provides £500 towards the cost of training courses.

The Clean Heat Market Mechanism (CHMM) adds another driver. Boiler manufacturers must now achieve a percentage of their sales from heat pumps, starting at 4% in year one and rising to 8% in year two. They are actively subsidising heat pump installations and training programmes to hit these targets. That creates opportunities for installers willing to partner with manufacturers.

The Gas Safe qualification you already hold is not wasted. Gas boilers will remain in the retrofit and maintenance market for decades. But if new-build work is part of your business model, adding heat pump capability is no longer optional.

MVHR and ventilation: a whole new revenue stream

MVHR unit mounted on a wall with white ductwork running through a ceiling void
MVHR systems recover up to 90% of heat from extracted air, making them essential in airtight FHS-compliant homes

Here is where the real opportunity sits for trades businesses looking to diversify. MVHR is relatively new in mainstream UK housebuilding. Most tradespeople have never installed one. That means the competitive field is wide open.

Under the FHS, homes must achieve airtightness of 3 m³/(h.m²) or better. At that level, you cannot rely on natural ventilation through gaps in the building fabric. Mechanical ventilation becomes a necessity. MVHR recovers up to 90% of the heat from extracted air, which is why it is the default choice for FHS-compliant homes.

A typical domestic MVHR installation is worth £3,000 to £5,000 for supply and fit. Across 190,600 new homes per year, that is a market worth somewhere between £570 million and £950 million annually. And because the systems need regular commissioning, filter changes, and maintenance, there is an ongoing service revenue stream too.

The skills crossover is strongest for heating engineers and plumbers. Ductwork design principles are similar to pipework design. Airflow balancing is comparable to hydraulic balancing. Several manufacturers now offer two-to-three day MVHR installation courses specifically aimed at heating professionals looking to diversify.

The building control process for MVHR is straightforward since it falls under the same Part F compliance that building control already inspects.

What this means for builders and general contractors

Close-up of construction worker applying insulation to timber frame wall panel
Fabric-first construction demands better insulation detailing and more rigorous airtightness at every junction

Builders face the broadest set of changes. The FHS is not just about bolting on new technology. It fundamentally changes how you build the envelope.

Fabric-first construction means getting the walls, floor, roof, and windows right before you think about services. The improved U-values demand thicker insulation, careful detailing around junctions, and relentless attention to thermal bridging. Every gap, every cold bridge, every poorly sealed junction shows up on a blower door test.

The airtightness target of 3 m³/(h.m²) is achievable, but it requires a different mindset on site. Every penetration through the air barrier needs sealing. Service entries, pipe runs, electrical boxes, window frames: all potential weak points. Site managers will need to train crews on airtightness principles, not just rely on the specialist doing the test at the end.

The Home Builders Federation (HBF) estimates an average additional cost of £4,350 per dwelling for FHS compliance. Independent analyses put it higher, between £5,000 and £10,000, representing a 3-8% uplift on build costs. Over a 10-year period, the total additional cost to the industry is estimated at £7.7 billion.

SME builders face the biggest pressure 57% of SME builders cite viability as their key barrier to FHS compliance, and 70% say current market conditions limit their investment appetite. Larger housebuilders can absorb the upfront costs and spread them across volume. Smaller builders need to factor these costs into tenders now, before they are locked into fixed-price contracts that assumed traditional build methods.

The Building Safety Act requirements layer on top of the FHS for higher-risk buildings, creating a compliance burden that smaller firms may struggle with unless they plan ahead.

The skills and training gap

The trades gave me everything. The discipline, the work ethic, the problem-solving mindset. But the trades are changing fast. The people coming through now need different skills alongside the traditional ones.

The numbers tell the story plainly. The UK currently has around 10,000 MCS-certified heat pump installers. The government needs 33,700 full-time equivalents to meet its 2030 targets. That is a gap of roughly 24,000 trained installers.

CITB forecasts that the construction industry needs 239,300 additional workers over the next five years across all trades. Heat pump installation, MVHR commissioning, solar PV, and airtightness testing are all areas where demand will outstrip supply for years to come.

A City Plumbing survey found that 58% of UK heating professionals have already trained or upskilled in heat pumps. But 73% say there are not enough qualified installers to meet demand. The top barriers to training? Cost (28%), lack of local training centres (24%), and time constraints (24%).

Training costs and support Heat pump training courses typically cost £1,000 to £2,500 depending on the provider and depth of coverage. The government's Heat Training Grant covers £500 towards this. MCS company certification adds another £1,500 to £3,000. Factor in lost earnings during training days and the realistic all-in cost for a sole trader is £3,000 to £5,000. That is a significant investment, but the return is access to a market that will only grow.

When I think about apprenticeships and workforce development, this is exactly the kind of transition where proper training infrastructure matters. A trade is a craft. And learning to work with these new systems takes time, repetition, and the ability to make mistakes without those mistakes being severe. The training pipeline needs to scale up now, not in 2028.

The digital transformation roadmap for trades businesses maps out how technology adoption and upskilling fit together as part of a broader business strategy.

The cost question: who pays for the transition?

Tradespeople reviewing building plans and cost estimates spread across a work surface
The additional build costs will reshape how trades businesses price new-build work from 2027

The government's position is that the additional cost per dwelling is manageable. Their estimate of £4,350 per home assumes economies of scale as the supply chain matures. The industry is less optimistic.

The HBF has warned of a "crippling impact on viability" for SME builders. The Federation of Master Builders (FMB) raises similar concerns. When 57% of small builders say the cost makes projects unviable, that is not a fringe opinion. It is the majority view from the people who actually build the houses.

In practice, the cost lands in three places:

  • House prices. Developers will pass through as much as the market allows. In areas with strong demand, buyers absorb most of the uplift.
  • Developer margins. Where the market will not accept higher prices, developers take the hit. This squeezes smaller builders hardest.
  • Subcontractor rates. Trades businesses with scarce skills (heat pump installation, MVHR commissioning) will command premium rates. Trades businesses without those skills will face rate pressure as conventional work shrinks.

The Boiler Upgrade Scheme (BUS) grant of £7,500 per heat pump installation helps on the retrofit side, but it does not apply to new builds. The logic is that the FHS makes heat pumps mandatory, so no incentive is needed. For homeowners replacing oil or LPG systems, the grant rises to £9,000 from July 2026.

For trades businesses, the financial case for retraining is strongest when you look at it from the other direction. What does it cost to not retrain? If new-build work is 30% of your revenue and it dries up because you cannot offer FHS-compliant services, the training investment looks cheap by comparison.

What tradespeople are saying

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Frequently asked questions

No. The FHS applies to new-build homes only. Extensions, renovations, and conversions fall under Part L 2021 (the current standard). There will be a separate Future Buildings Standard consultation for non-domestic buildings, but that is a different timeline entirely.

Yes. The gas boiler ban only applies to new builds from 2027. Replacement boilers in existing homes are unaffected. The retrofit market for gas servicing, repairs, and replacements will continue for many years. Your Gas Safe registration remains valuable.

Most heat pump installation courses run over three to five days. MCS company certification takes an additional two to four months to process. Budget three to six months from starting your first course to being fully certified and ready to take on MCS-registered work.

Scotland has its own building standards and its own equivalent regulations. The New Build Heat Standard in Scotland already requires new-build homes to use zero direct emission heating systems from April 2024. Wales follows the England FHS timeline broadly, but the Approved Documents may differ in detail.

Right now, yes. Heat pump installations are more complex, take longer, and fewer people can do them. Basic supply-and-demand economics. As more installers qualify, rates will normalise, but the structural shortage means premium rates should hold for at least three to five years.

My verdict

The FHS is not a threat. It is a market signal.

The trades industry is changing. And it is changing fast. The Future Homes Standard is the clearest signal yet about where new-build work is heading. Heat pumps, MVHR, fabric-first construction, solar PV: these are not optional extras. They are the new baseline. The businesses that invest in training and certification now will have a two-to-three year head start on everyone else. The ones that wait will find themselves competing for a shrinking pool of conventional work. I have watched enough industry transitions to know that the early movers always come out ahead. This one is no different. Book your training while you still have options.

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