The regulator will have the power to remove any product from the market that presents a significant safety risk and prosecute any companies who flout the rules on product safety.
It will have enforcement powers including the ability to conduct its own product-testing when investigating concerns.
“Businesses must ensure that their products are safe before being sold in addition to testing products against safety standards,” MHCLG said.
MHCLG confirmed the move after evidence was revealed during the Grenfell Tower inquiry which found “deliberate attempts to game the system and rig the results of safety tests”.
The government has been heavily criticised for many facets of its response to the Grenfell Tower disaster which took place more than three years.
Complaints often centre on its slow response times and the government is still finalising its remedy for high rise buildings with cladding on them, which is likely to include residents being stuck with footing the bill for making the buildings fire safe.
Work with trading standards
The new regulator will operate within the Office for Product Safety and Standards which will be expanded and given up to £10m in funding to establish the new function.
It will work with the Building Safety Regulator and Trading Standards to encourage and enforce compliance.
The government has also commissioned an independent review to examine weaknesses in previous testing regimes for construction products, and to recommend how abuse of the testing system can be prevented.
MHCLG said it will be led by a panel of experts with regulatory, technical and construction industry experience and will report later in the year with recommendations.
Construction industry malpractice
Housing secretary Robert Jenrick MP said: “The Grenfell Inquiry has heard deeply disturbing allegations of malpractice by some construction product manufacturers and their employees, and of the weaknesses of the present product testing regime.
“We are establishing a national regulator to address these concerns and a review into testing to ensure our national approach is fit for purpose.
“We will continue to listen to the evidence emerging in the inquiry, and await the judge’s ultimate recommendation – but it is already clear that action is required now and that is what we are doing.”
Chairwoman of the Independent Review of Building Regulations and Fire Safety Dame Judith Hackitt said: “This is another really important step in delivering the new regulatory system for building safety. The evidence of poor practice and lack of enforcement in the past has been laid bare.
“As the industry itself starts to address its shortcomings I see a real opportunity to make great progress in conjunction with the national regulator.”