The Late Payment Crisis in UK Construction
Late payment has been called the single biggest threat to small and medium-sized construction businesses in the United Kingdom. Industry surveys consistently show that UK construction firms wait an average of 45 to 60 days beyond agreed terms to receive payment, with some reporting delays of 90 days or more.
The consequences are severe. According to the Federation of Small Businesses, late payments contribute to the closure of approximately 50,000 small businesses in the UK each year, with construction disproportionately affected. For a sole trader or small builder, a single unpaid invoice of £10,000 to £20,000 can mean the difference between staying in business and going under.
The problem runs throughout the supply chain. Main contractors wait on developers, subcontractors wait on main contractors, and material suppliers wait on everyone. The result is a culture where late payment is normalised, and the people doing the actual work bear the greatest financial risk.
What Is Escrow-Style Payment Protection?
Escrow is a financial arrangement where a neutral third party holds funds on behalf of two transacting parties. The funds are only released when pre-agreed conditions are met. In property transactions, solicitors have used trust accounts in this way for decades.
Escrow-style payment protection applies this same principle to construction projects, but with a critical improvement: milestone-based releases. Rather than holding the entire project sum and releasing it all at once at the end, funds are deposited and released stage by stage as work is completed.
This approach protects both parties:
- The builder knows the money is there before starting work. No more chasing unpaid invoices or worrying about whether the client can actually afford the project.
- The buyer knows their money is safe and will only be released when work is completed to the agreed standard. No more paying upfront and hoping for the best.
How Wediate Works for UK Construction Projects
Wediate provides escrow-style payment protection specifically designed for the construction and trade industries. Here is how a typical UK project works with Wediate:
Step 1: The Builder Sets Up a Holding Account
The builder applies for a Wediate holding account at wediate.co.uk/uk/apply. Once approved, they receive a dedicated UK bank account with a Sort Code and Account Number. This account is used exclusively for that builder's Wediate-protected projects.
Step 2: The Quote Includes Wediate Details
When the builder sends a quote to a prospective client, they include their Wediate holding account details and CC Wediate on the email. The client can verify the account on the Wediate Account Directory before depositing any funds.
Step 3: Milestones Are Agreed
Both parties agree on the project milestones and the amount to be deposited for each stage. For example, a £30,000 kitchen renovation might be broken into:
- Milestone 1: Strip-out and demolition — £5,000
- Milestone 2: First fix (plumbing, electrics, plastering) — £10,000
- Milestone 3: Second fix and joinery — £10,000
- Milestone 4: Final fit-off and snagging — £5,000
Step 4: The Buyer Deposits Funds
The buyer transfers the first milestone amount into the Wediate holding account. The builder is notified that funds are secured, and work begins.
Step 5: Work Is Completed and Funds Released
When the builder completes a milestone, they request a release through the Wediate portal. The buyer confirms they are satisfied with the work, and Wediate verifies through a dual approval process (email plus phone or WhatsApp). Funds are then released to the builder.
This continues milestone by milestone until the project is complete.
Benefits for UK Builders
Guaranteed Payment for Completed Work
The most significant benefit for builders is certainty. When a client deposits funds into a Wediate holding account, the money is there — held securely and ready to be released when the milestone is complete. No more chasing invoices, sending reminders, or wondering whether you will be paid.
Professional Credibility
Having a Wediate holding account signals to prospective clients that you are a professional, trustworthy contractor. It shows you are willing to work within a structured payment framework, which builds confidence — especially with first-time renovators and homeowners who may be nervous about engaging a builder they have not worked with before.
Cash Flow Predictability
With milestone-based releases, builders can plan their cash flow with confidence. You know exactly when funds will be available — when the milestone is complete and approved. This makes it easier to pay your own suppliers and subcontractors on time.
Reduced Disputes
Because milestones are agreed upfront and both parties must approve each release, the scope for disputes is significantly reduced. If there is a disagreement about whether work meets the agreed standard, it is addressed at the milestone level rather than escalating into a full project dispute.
Benefits for UK Buyers and Homeowners
Money Is Protected Until Work Is Done
For homeowners commissioning building work, the biggest fear is paying for work that never gets completed or is done to a poor standard. With Wediate, your money sits safely in the holding account and is only released when you confirm you are happy with each milestone.
Transparent Progress Tracking
The Wediate online portal gives buyers full visibility of their project milestones, deposit status, and release history. You always know exactly where your money is and what stage the project has reached.
Peace of Mind
Engaging a builder — especially for a large project — is stressful. Wediate removes the financial risk from the equation, letting you focus on the exciting part: watching your project come to life.
Why 2026 Is the Year to Adopt Payment Protection
The UK construction industry is under increasing pressure to modernise its payment practices. Government reports, industry bodies, and trade associations have all called for better payment protection for small businesses. While legislative change is slow, the technology to solve this problem is available right now.
Wediate offers a practical, affordable solution that any builder or homeowner can adopt immediately. At just 1.5% inclusive of VAT, it is a fraction of the cost of legal disputes, debt recovery, or the financial damage caused by late and non-payment.
Get Started with Wediate UK
Whether you are a builder looking to secure your payments or a homeowner looking to protect your renovation budget, Wediate is here to help. Apply for your UK holding account today at wediate.co.uk/uk/apply and start every project with confidence.