Cowboy builder scheme 2026: what it means for homeowners

At the end of August the government announced a crackdown on cowboy builders. If you are planning building work, you have probably seen the headlines. This guide explains what was actually announced, what it changes for you, what it doesn't, and what to do on your next project.

What the government announced

On 28 August 2026 the government set out two measures in its announcement on cowboy builders:

• An Approved Code for home improvement traders. From September, businesses can sign up to show they meet higher standards of customer service, transparency and dispute resolution, so you can pick them out when you hire.
• Payments linked to milestones. The government is backing a system that protects your money during a project, with payments tied to key stages of the work rather than paid up front.

The reason is the scale of the problem. More than one in four UK adults who had home improvement work done in the previous 18 months ran into problems, according to Citizens Advice, and the government puts the losses on home and garden maintenance in 2024 at over £10.3 billion.

What it means for you

The biggest change is the expectation it sets. Paying for building work in stages, rather than handing over a large deposit, is now what the government is telling every homeowner to ask for. If a builder wants a big payment before anything happens on site, you are entitled to ask why.

The Approved Code also gives you another thing to check when you hire. If a builder has joined, they have signed up to standards on how they treat you and how they handle complaints.

What it doesn't do

It isn't a licence. Joining the Approved Code is voluntary, and a builder who hasn't joined can still trade legally. Plenty of good builders won't have signed up in the first months, and some poor ones may. The register is one signal, not proof of good work.

It also doesn't change your contract. Your rights under the Consumer Rights Act 2015 are the same as before, and a builder is still only bound by what you agree with them in writing. Some details of the scheme were still being settled at launch, including how it fits with existing schemes such as TrustMark, so check what a trader is actually signed up to.

Five questions to ask about any payment arrangement

Whether your builder suggests an app, a payment platform or a simple schedule of bank transfers, these questions tell you how protected your money really is.

1. Is the money for each stage set aside before the stage starts? Staged payments only protect you if the money for a stage is held somewhere safe, not handed straight to the builder.
2. Who holds it, and are they authorised? Ask which company holds the money. If it is an electronic money institution or a bank, you can check its authorisation on the FCA's Financial Services Register.
3. What has to happen before money is released? Your approval of the work, or just the builder saying it's finished? Find out what happens if you don't respond.
4. What happens if you disagree? Ask who decides, how long it takes, and where the money sits in the meantime.
5. What does it cost, and who pays? The fees should be published before you sign up, not revealed afterwards.

How to protect yourself on your next project

None of this replaces the basics, and the basics still prevent most problems:

• Check the builder before you hire them: their company record, insurance, trade body membership and reviews. Our guide on how to check a builder is legitimate takes about ten minutes to follow.
• Get a written contract that sets out the scope, the price and when each payment is due. See what a builder contract should include.
• Pay in stages tied to work you can inspect, not to dates. Our guide to stage payments for building work shows what a fair schedule looks like.
• Keep any deposit small and tied to real costs such as materials. Here's how much deposit is normal.
• Keep a record of messages, photos and changes to the job as it goes.

Where Renopay fits

Renopay isn't part of the government scheme, but it works the way the announcement describes. Your builder sets out the job in stages, and you pay for each stage before it starts. The money is held securely by our payment partner, OPP, an electronic money institution regulated by the Financial Conduct Authority, and it is released to your builder when you approve the work. If you disagree about a stage, only that stage is paused, and an independent RICS-qualified surveyor can decide.

You pay 1% of each stage, including VAT, and there is no subscription. See how Renopay works or how your money is protected.

Frequently asked questions

Is the Approved Code compulsory for builders?

No. It is a voluntary scheme that lets traders show they meet higher standards on customer service, transparency and dispute resolution. It is not a licence to trade, so a builder who has not joined can still work legally.

When does the new scheme start?

The government said the Approved Code would start from September 2026. Reports at launch described it going live with the first traders in September and being fully in place by December 2026.

Do builders now have to use milestone payments?

No. The government is backing a system that links payments to project milestones, but using it is not a legal requirement. You can still ask for stage payments on any project, and you should.

Is Renopay part of the government scheme?

No. Renopay is independent of the Approved Code and of the payment system named in the announcement. It works the same way the government describes: the money for each stage is held securely before the stage starts and released as the work is approved.