How Biodiversity Net Gain legislation could create opportunities for developers

With biodiversity net gain (BNG) legislation now in force, developers and landowners are naturally preoccupied with how this impacts the development potential of their sites.

While navigating the new legislation can present another planning hurdle, it also has the potential to provide a revenue stream for land deemed unsuitable for development.

Creating biodiversity units on your land

If developers are unable to achieve the legal requirement of 10% BNG on site, they can buy ‘credits’ in new or enhanced habitats off site to satisfy their BNG obligations.

With supply of off-site biodiversity ‘units’ currently extremely limited, there is a significant opportunity for land with no development potential to generate additional income through the creation of habitats, that could add to the supply of BNG units.

Current research suggests that prices are between £20,000 per unit for areas of’ low distinctiveness’ and £100,000 per unit for areas of ‘high distinctiveness’ (this will likely vary across different parts of the country). While the credit system is complex, with multiple exceptions and variants, it is possible for 1ha of land to yield multiple biodiversity units, depending on the habitat created or enhanced. These prices will likely fluctuate over time as more sites are allocated for BNG.

Planning permission

For land with an agricultural, forestry or horticultural use designation, planning permission would not ordinarily be required to create habitats. There are exceptions, and we would recommend engaging with a planning expert if you are considering making your land available for BNG credits.

While every local authority (or other responsible body) will have its own processes, our experience is that some elements are consistently required:

Landowners will need to enter into a legal agreement with the local planning authority (LPA) to agree the habitat and ensure its management for a minimum of 30 years.

An ecology report will be required to assess the baseline of the habitat levels, both before and after any enhancements have taken place. A metric designed by DEFRA will need to be completed as part of the ecological work to demonstrate the potential of the site.

Local Plan Process

When presenting a site as a potential habitat for BNG units, the earlier you can engage with the LPA, the better.

By presenting your site during local or neighbourhood plan consultations, or in respect of a Local Nature Recovery Strategy (which is prepared separately to the local plan process) you can ensure the council has time to carefully consider it at an early stage. This benefits the council too, allowing them to ensure a sufficient supply of sites in their areas.

Early engagement also means landowners could influence the wording of any BNG specific policies, including the information which might be required to secure biodiversity units. It also means your proposals will be visible to any developers (who may need to buy BNG credits) when local plans or nature recovery strategies are published.

There are some associated costs, like those for site assessment and improvement, and professional planning and legal services. However, the revenue from BNG units could be significant.

Rather than being a drain on resources, constrained or marginal land can work more effectively; Creating BNG units is especially helpful for those with land in the green belt or areas at risk of flooding. If options for development have been ruled out due to land or planning constraints, this could be a great option for a consistent and guaranteed revenue.

SF Planning have in-house policy experts who are advising landowners and developers on the potential for their land and representing their interests to the LPA, get in touch for more information about how we can help.

Liz Shield MRTPI
SF Planning

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