The Building Safety Act 2022: An update on the regulatory impact and liability risks for lenders

An update on the regulatory impact of the Building Safety Act 2022 and the potential risk of liabilities for lenders who mortgage buildings.

The Building Safety Act 2022 focus on increased accountability creates ongoing liabilities beyond the construction phase of a building and on into the occupation phase. In years to come, and with limited enforcement to date under the regime, lenders may be caught unaware of any potential obligations they have, particularly where they become occupiers of a relevant building.

The Building Safety Act 2022

In direct response to the Grenfell Tower tragedy, issues identified by the subsequent Grenfell Tower Inquiry and Dame Judith Hackitt’s Building a Safer Future: Final Report, the Building Safety Act 2022 (BSA 2022) received Royal Assent in April 2022. The act introduced a more stringent building control regime for the design and construction of all buildings.

The primary focus of the BSA 2022 is on fire risk and structural safety. Keen attention is given in the act to ensure greater accountability and responsibility especially in respect of higher-risk buildings (HRB) throughout their lifecycle. An HRB is typically defined to be a building in England that is at least 18m high or has at least seven storeys and contains at least two residential units.

Building Safety Regulator

As of 27 January 2026, The Building Safety Regulator (BSR) has become the standalone body, whose functions have been transferred away from the Health and Safety Executive. The move towards a single construction regulator signals a more rigorous approach to building safety regulation compliance going forward. Since the regulatory framework is still relatively recent, there is currently limited case law and statutory guidance to understand how the regulator intends to carry out its enforcement powers, but the transition aims to improve accountability for the regulator and reduce delays for Gateway 2 and 3 approvals.

The Golden Thread and Accountable Person

A golden thread of information was an important recommendation in Dame Judith Hackitt's report. Its purpose is to ensure that accurate and up-to-date documentation about HRBs is available to those people responsible for building safety. Regulatory bodies such as fire and rescue services, the BSR and other building control bodies also use the information.

The BSA 2022 also introduced an Accountable Person, a specific type of duty holder responsible for the building post-construction. When building work is complete, the golden thread must be handed to the Accountable Person(s) responsible for the occupied building.

If the golden thread regime is followed, there should be a digital record of information covering the whole lifecycle of a building, from design phase to post-construction. The Government states that the thread must be stored digitally and whilst this can be on multiple systems, an optimal platform would contain a building’s “single source of truth”. Further directions aim to ensure information about a building is current, securely kept and able to be shared with the appropriate people. This is contained fully in The Building (Higher-Risk Buildings Procedures) (England) Regulations 2023 under Part Four.

If lenders inherit the obligations of designated dutyholders, they could face legal and financial liabilities should building safety standards prove inadequate. A way to mitigate against any risks associated with this would be to understand the information about the building by consulting the golden thread. It is important to stress that lenders need to conduct careful due diligence surrounding any buildings and relevant security issues, especially those which fall under the definition of an HRB.

What’s next for building safety?

Looking forward, the Government may introduce a new Remediation Bill to Parliament in 2026, a key measure proposed during its evolving Remediation Acceleration Plan. If enacted, the Remediation Bill would impose legal deadlines for those responsible to remediate defective buildings by a date between 2029 and 2031 depending on the height of the building, the tallest buildings being prioritised. If the Bill goes ahead, it will carry criminal sanctions for non‑compliance where a building has not been remediated by the applicable deadline. There are also a growing number of matters which are the subject of dispute where these issues are being litigated, key issues being the responsibility for any remedial works and compensation.

If you should have any questions, please reach out to Jason Cropper, Danielle Ferguson, Francesca Chapman or Rhiannon Edwards.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at February 2026. Specific advice should be sought for specific cases. For more information see our terms and conditions.