A new Construction Licensing Task Force will lead the development of the scheme and be supported by a number of industry bodies.
The scheme — which will be chaired by Liz Peace — aims to transform the sector into a high-quality and professional industry.
“Mandatory licensing has the potential to transform our industry into a world-leading sector,” said Liz.
“Licensing will help drive up standards and help address the issue of quality and professionalism, which, [in] some areas, is falling short.
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“At the heart of what we’re trying to do is increase protection for the ordinary person who engages with the construction sector.”
Brian Berry, chief executive at the FMB, added: “It’s unacceptable that more than half of consumers have had a negative experience with their builder.
“However, we shouldn’t be surprised by this given that in the UK, it is perfectly legal for anyone to set up a building firm and start selling their services without any prior experience or qualifications.
“This cannot be right given the nature of the work and the potential health and safety risks when something goes wrong.
“I am delighted to be part of the Construction Licensing Task Force and will ensure that any such scheme works for small building firms.”