Biodiversity Net Gain (BNG) is a hot topic in construction – how the sector can protect and promote biodiversity while driving ahead with building new homes and infrastructure.
In accordance with the 2021 Environment Act, developers of homes, businesses and infrastructure in England are required to deliver a minimum 10% increase in biodiversity compared to what was on site before development to achieve planning approval.
It’s a crucial part of the government’s strategy to halt biodiversity loss and protect the environment.
Here, Bethan Williams, Partner in Ellisons’ Commercial Property Team, outlines how small developers can take advantage of significant Biodiversity Net Gain exemptions, with contributions from Peter Riches, Director at Morley Riches Chartered Surveyors, and Robert Pomery, Director at Pomery Planning Consultants.
How does BNG work?
BNG is measured using the DEFRA Statutory Biodiversity Metric 4.0, which assesses habitat size, condition, distinctiveness and strategic significance.
Where does BNG take place?
- On-site: this is often the local authority’s preferred method as it requires developers to enhance biodiversity within the project site.
- Off-site: if on-site gains aren’t possible, developers buy units from habitat restoration projects. This method requires completion of a S106 Agreement or conservation covenant and needs the land to be managed for biodiversity for at least 30 years.
- Statutory Credits: these can be purchased if no other options exist.
What impact has BNG had so far?
BNG has ensured that new developments consider their impact on nature from the outset through better location and design choices and by avoiding or compensating for impacts. It prevents habitat loss from development.
Developers are required to seek ecological advice earlier in the planning process and are seen to be designing their layout to avoid impacts on biodiversity and deliver more habitat on site.
The Government has recognised that while the policy is effective overall, some smaller developments and specific types of sites – in particular on brownfield land – are finding BNG more challenging and proportionately more expensive to deliver.
Inflation, rising construction costs, disproportionate administrative burdens and delays in obtaining habitat surveys mean a staggering number of sites are now deemed unviable for development.
Peter Riches, Director at Morley Riches Chartered Surveyors, adds that BNG can have a significant impact on the viability of a development.
Factors are:
- Brownfield sites may cost more to remediate (e.g demolition costs) but generally there will be less cost to achieve a 10% improvement in biodiversity. Greenfield sites will have a higher existing biodiversity value, particularly if there are habitats such as trees, hedges or watercourses which will be removed by the development. Hence 10% improvement is more expensive to achieve. This is the thrust of the existing government policy, i.e to encourage the development of brownfield sites and make greenfield sites financially less attractive.
- Generally, the lowest cost solution is achieved if the requirements can be met on site. However, this can result in a lower development density which, in itself, adversely affects viability.
- Off-site contributions as described above can come at a higher price. A recent development of 25 dwellings required ten Habitat Units to be implemented on a nearby property at cost of £250,000, i.e £10,000/dwelling. To put that figure into context, this effectively doubled the total of the s106 financial contributions.
- The option of last resort is to purchase Statutory Credits. Typically, this will double the figure above. However, if a highly distinctive habitat is in the affected area, the cost will increase exponentially to levels in excess of the underlying plot value.
- In summary, an additional cost of £10,000 to £20,000 per dwelling has a dramatic impact on the viability of any development. BNG costs in this range could halve the value of a plot.
- Based on the average number of dwellings per hectare (30), a 2 hectare (ha) site is likely to deliver in the region of six dwellings. The changes now being considered will only benefit the smallest schemes and will do very little to dent the Government’s target for new homes.
Changes for SME developers
There were over 25,000 responses to the Government’s 2025 consultation on improving BNG for minor, medium and brownfield developments which has led to them introducing targeted changes to make the system work better whilst maintaining their commitment to nature recovery.
Smaller developments on sites below 0.2ha will be exempt from BNG requirements, reducing costs for small SME developers and saving local planning authorities time and money.
The Government has committed to consulting on an additional targeted exemption for brownfield residential developments, testing appropriate definitions of brownfield and a range of potential exemption sizes up to 2.5ha. They have also stated they will make changes to ensure it is easier, quicker and cheaper to deliver BNG off site.
We await the full consultation response and implementation timeline for nationally significant infrastructure projects (NSIPs), which will go live in May 2026.
Until changes are officially implemented, which will require secondary legislation in some cases, BNG continues to apply in its current form and developers should continue to follow existing guidance and legislation when delivering BNG.
Key considerations for developers
For sites below 0.2ha, many SME developers are holding off making their planning applications until the secondary legislation has been implemented, but we are expecting an influx of applications to be submitted once that occurs.
The 0.2ha exemption will not be retrospective, thus it is expected that SME developers who have eligible sites with existing permission (which have BNG obligations) will resubmit their applications for planning. Applications which have been submitted will be revoked and resubmitted once the secondary legislation is implemented.
Developers need to consider the inevitable delays that will be experienced with their local planning authority from the influx of applications submitted.
Robert Pomery, Director at Pomery Planning Consultants, outlines how to approach current applications and practical strategies to avoid delay.
He said: “Developers are advised to consider the implications of BNG when first assessing a site.
“The considerations include understanding the site area, will it qualify for BNG and will it qualify for the provision of affordable housing (>0.5ha)?
“If the site qualifies for BNG, as all sites do presently with some very limited exceptions, what is the quality of the existing planting, are there many trees, are there hedgerows that might need to come out or are there ponds on the site or nearby?
“If some or all of these items are present, the early advice from an ecologist would be recommended.
“An ecologist can provide an estimate of the likely cost of BNG credits or the amount of land likely to be set aside for on-site BNG.
“It should be noted that on-site BNG does not count as a garden, it must be separate from private gardens, fenced and have access for 30 years of maintenance.
“These factors will undoubtedly influence the amount of development possible on the site and must be reflected in the final price paid for the land.”
