FMB: £2.7bn of Southern building work on hold over trust
Builders say VAT and trust are stalling home improvements in the South. Here is what it means for heat pump, insulation and solar costs before March.
Homeowners in the South of England are delaying a large amount of building work because they can't find a builder they trust, and the 0% VAT window on energy-saving installs is due to close in March. Neither is a reason to rush into a contract. Both are reasons to plan carefully.
What the FMB says
According to the FMB, Federation of Master Builders, homeowners across the South are putting off about £2.7 billion of building work every year because they struggle to find a trustworthy builder. The trade body, which published the figure ahead of the Budget, says research it carried out with the HomeOwners Alliance found that almost half (49%) of homeowners would take down a wall themselves rather than hire a professional.
The FMB also points to VAT. It says most home improvement work still carries 20% VAT, while the zero rate on measures such as insulation, heat pumps and solar panels ends next March. It wants the Chancellor to simplify and extend VAT relief beyond energy efficiency. Builders face a messy invoice trail when an efficiency job is bundled with general upgrades, because they must work out which parts qualify. The FMB is also calling for mandatory licensing so homeowners can tell good builders from bad.
These are the FMB's claims and requests. Nothing has been decided, and we will update our figures if the Budget changes the rules.
What applies today
Our fact sheet confirms the current position:
- 0% VAT applies to installing energy-saving materials (heat pumps, insulation, solar panels, batteries) until 31 March 2027.
- The Boiler Upgrade Scheme in England and Wales takes £7,500 off an air source or ground source heat pump, provided the installer is MCS certified.
- In Scotland, Home Energy Scotland offers a grant of up to £7,500, plus an optional £7,500 interest-free loan.
- The Warm Homes Plan, published in January 2026, commits £15bn to 2030, including grants for low-income households and low- or zero-interest loans being phased in.
What it means for project costs
Our figures include 20% VAT except where 0% applies. The zero rate applies only to the qualifying energy-saving work, not to everything on the invoice.
Heat pumps. A typical air source heat pump installation costs £12,900, with a usual range of £10,000 – £16,700. The £7,500 grant is a far bigger lever than VAT here, but only if the installer is MCS certified. See our [heat pump cost guide](Air source heat pump).
Wall insulation. External wall insulation typically costs £26,000, within a range of £20,300 – £33,800. It is a large job, and the VAT treatment makes the timing matter. If you want it done before the zero rate lapses, you need to start getting quotes now. See the [wall insulation guide](External wall insulation).
Solar panels. A typical 6 kWp system costs £12,500, and the range is £9,800 – £16,300. A battery changes the total, so check the options in our table:
| Material | Typical | Usual range | Lifespan |
|---|---|---|---|
| No battery | £9,500 | £7,400 – £12,300 | – |
| 5 kWh battery | £12,500 | £9,800 – £16,300 | – |
| 10 kWh battery | £15,600 | £12,200 – £20,300 | – |
| 13.5 kWh battery | £17,800 | £13,800 – £23,100 | – |
More in our [solar panel cost guide](Solar panels).
The bundling problem
The FMB's point about invoices matters to you directly. If you combine a qualifying job with something else, such as a new bathroom or a loft conversion, the builder must split the invoice. Ask for a line-by-line breakdown that shows which items are at 0% and which are at 20%. A vague single price makes it hard to check you are getting the VAT treatment you are due.
For context, a typical bathroom renovation costs £7,000, and a typical new kitchen £7,800. Neither qualifies for the zero rate, so a builder who offers a blanket "no VAT" deal on them deserves questions.
How to protect yourself when trust is the problem
Trust is the issue the FMB highlights, and you can reduce the risk without any new law:
- Get at least three itemised quotes. Compare labour, materials and VAT separately.
- Check registrations. Heat pumps need an MCS-certified installer for the grant. Notifiable electrical work in England and Wales must be done by a registered electrician (Part P) or notified to building control. Replacement windows should come from a FENSA or CERTASS registered installer. Gas work must be done by a Gas Safe registered engineer.
- Don't do structural work yourself. Taking down a wall is not a weekend job, and the FMB's figure is a reminder of why. Get advice first.
- Pay in stages. Tie payments to completed work, not to dates.
- Test the price. Our "is my quote fair" tool lets you compare a quote with our live cost model, which we build from labour hours × local rates plus materials and check against market prices and real quotes.
Should you wait for the Budget?
If you are planning insulation, a heat pump or solar panels, we wouldn't wait on the off chance of an extension. The zero rate has a firm end date of 31 March 2027, and installers' diaries tend to fill up as deadlines approach. Booking surveys now keeps your options open whatever the Chancellor announces.
For other work, such as kitchens, bathrooms and decorating, the current rules give you no VAT reason to hurry. Pick a builder you are confident in, and don't let a deadline push you into a rushed decision.
We will keep our figures current as soon as anything changes.