How will immigration law reforms impact the built environment sector?

The UK’s immigration policies continue to dominate the headlines, so it was no surprise that immigration laws were high on the agenda at the recent political party conferences.

A number of changes have already happened to UK business immigration laws during 2025 and we are expecting to see further changes in the coming months. These changes have introduced challenges for the built environment (BE) sector, which is already grappling with labour shortages, rising costs and net zero construction targets. So what’s been going on?

The statement of changes to the immigration rules came into effect on 22 July 2025 and marked the first phase of reforms to work visas. These changes form part of the governments’ broader strategy to continue to reduce net migration to the UK, whilst still allowing access to essential skilled labour from overseas.

The main changes of concern to the BE sector in respect of skilled workers are as follows:

Skills threshold – The required skill level for a skilled worker visa has reverted to the pre-Brexit position of RQF Level 6 (degree-level). This in practice does not mean that the applicant must hold a degree, it is that the role is deemed to be at graduate level. This change abolishes over 100 eligible occupations, making the number of roles capable of sponsorship more limited and aiming the skilled worker route for more senior and specialist roles.

Transitional arrangements – The new rules only apply to those newly applying as skilled workers from 22 July 2025.  Those already in the UK as a skilled worker in an RQF Level 3 (A-Level) role are unaffected. This allows existing skilled worker visa holders to continue to renew their visas and change employers without the need to meet the new RQF Level 6 skills threshold.

However there will also be time-limited access to roles below RQF Level 6 through the immigration salary list and newly created temporary shortage list, which will include RQF Level 3-5 occupations. The immigration salary list, which offers a reduced salary threshold for certain occupations, is also due to be abolished altogether on 31 December 2026.

Some limited roles within the BE industry therefore have a temporary reprieve, but this won’t last forever, and as it stands, will be time-limited to end of 2026, unless the government decides to delay implementation. For example, certain types of welders, bricklayers, stonemasons, roofers, carpenters, boat and ship builders are currently on the immigration salary list and temporary shortage list.

Another important point to note – skilled workers accessing RQF Level 3-5 roles for the first time after 22 July 2025 will not be able to bring their dependants to the UK. This will certainly prove a disincentive for such workers to come to the UK to work.

The skilled worker minimum salary threshold is increasing to £41,700 (up from £38,700), and the new entrant salary rate is rising to £33,400 (up from £30,960). Although these increases are not as high as we anticipated, the increases are designed to encourage businesses to invest in the domestic workforce, while also ensuring that overseas workers have the means to support themselves while living in the UK.

We believe these changes reflect a fundamental change in how UK businesses can access talent from overseas and  will impact the built environment sector in particular, given it is suffering from a well-publicised shortage of workers.

What’s on the horizon?

Whilst home secretary Shabana Mahmood’s speech at the Labour Party conference re-confirmed many of the proposed changes outlined in the Immigration White Paper of May 2025, interestingly she focused heavily on her proposals to reform indefinite leave to remain to “ensure contribution to this country is a condition of living here”.

One of the biggest changes we are expecting in the coming months is around qualification for indefinite leave to remain (ILR) in the UK. Currently, a skilled worker can apply for permanent settlement after five years continuous residence in the UK. The government plan to increase the qualifying period for ILR to 10 years. If Reform come into power they are talking about abolishing it totally. Such uncertainty will provide a disincentive for many.

We are expecting further changes to come in the not-too distant future, including raising the Immigration Skills Charge (currently £5,000 for a five-year visa) and increasing the level of English language skills required for certain visa categories.

The actual and expected changes to the immigration rules during the rest of 2025 and beyond, demonstrate the government’s clear and continued commitment to further reduce migration into the UK. Policy seems to be going one way as the government grapples with political pressure. However, it remains to be seen whether this will have a significant impact on Labour’s other key aims –  to boost economic growth and to “get Britain building again”.

Rebecca Tester is a partner, business immigration law at Constantine Law