Katy Davis at Carter Jonas (London) argues that, a year after biodiversity net gain became mandatory, flexibility is essential to ensure onsite ambition aligns with offsite realities and genuine ecological outcomes.
A year after the introduction of mandatory biodiversity net gain (BNG), Carter Jonas carried out research to understand how the theory of the new policy had translated into practice. Our report, ‘Biodiversity Net Gain: Navigating the Evolving Market,’ analysed more than 3,300 hectares of development land across England and identified some important statistics in relation to on and offsite provision.
BNG, introduced under the Environment Act 2021, is intended to ensure that new developments leave a scheme’s biodiversity in a measurably better state, with a statutory minimum uplift of 10%. Few in the industry dispute the principle. The challenge is in how the regulations are implemented, specifically the requirement that developers should prioritise onsite solutions before considering offsite options, or purchasing statutory biodiversity credits from the government.
Positive industry response
It should be acknowledged – despite some significant challenges – that the industry’s response, one year on, was positive. Our research shows that 69.4% of proposed schemes already identify BNG solutions at the planning application stage, even though the requirement is technically a pre-commencement condition – demonstrating both pragmatism and goodwill on the part of the developer. And in many cases, developers are going well beyond the minimum requirement.
For housebuilders of all sizes, the willingness to engage early is welcome, but unless flexibility is built into the system, this momentum could quickly be undermined.
Limits of onsite delivery
Our research found that the average habitat baseline value is 3.45 units per hectare. To secure a 10% net gain on a typical 10 ha site, developers must, therefore, enhance or create habitats to achieve at least 37.95 biodiversity units (BUs). If the required 10% uplift cannot be delivered onsite, the costs for offsite compensation can quickly escalate, and the availability of habitat sites can vary considerably depending on location and habitat type required.
We found that only just over half (54.7%) of schemes are currently delivering BNG entirely on site. While this may be achievable on larger, unconstrained developments, it is not always practical. In urban areas, where land is scarce and density is a priority, the space required for habitat creation risks squeezing out much needed housing or open space for communities. Applied rigidly onsite, the impact of this is limited housing density, constrained viability, loss of open spaces for communities and sometimes tokenistic interventions that do little for nature.
For housebuilders, the result is fewer homes on the ground and schemes that become harder to balance against local need. Affordable and social housing schemes are particularly exposed. Many are located on smaller or brownfield sites, where opportunities for onsite mitigation are limited. Yet the costs of the alternative – securing offsite units – can be prohibitive, threatening the viability of schemes in areas where housing need is most acute.
Even when onsite measures are technically possible, they may not deliver the best ecological outcomes. Developers can end up installing green roofs or pocket habitats that achieve compliance under the metric, but contribute little to wider ecological networks. This risks creating a patchwork of isolated interventions rather than meaningful landscape scale restoration.
Strategic offsite solutions
The solution is not to reduce BNG, but to refine how it is applied. Offsite solutions – whether through habitat banks, landowner partnerships or strategic conservation projects – often deliver greater ecological value. They allow resources to be pooled, creating larger, more connected habitats that genuinely support nature recovery.
Part of the problem, however, is that such sites are not always readily available. Our analysis highlights significant regional disparity in the availability of offsite units. The east and south east of England are relatively well supplied, while other regions are facing shortages.
For housebuilders working on brownfield and infill sites, limited offsite options raise serious viability questions, especially for affordable housing.
If local planning authorities begin to insist that BNG must be delivered strictly within their own boundaries, the pressure on costs will intensify. A national framework is needed to avoid BNG becoming a postcode lottery.
An evolving market
The policy is already shaping new markets. Investment in habitat banks has risen sharply, and, according to Business Green, by 2035 as many as 91,000 biodiversity units could be in circulation. Local Nature Recovery Strategies, once published, will further influence values and direct investment toward priority areas. In parallel, the extension of BNG requirements to Nationally Significant Infrastructure Projects from May 2026 will increase competition for units.
For housebuilders, the challenge is to navigate this emerging market while keeping schemes viable and housing supply on track.
This evolution reinforces the importance of a flexible framework. Developers need confidence that offsite options will be available and affordable, and landowners need to better understand demand so that they can invest in habitat creation. Without this coordination, delivery of both housing and biodiversity gains risks falling short.
Balancing ambition with practicality
The Government’s stated aim is to halt nature’s decline and enhance ecological connectivity. Few would disagree with that ambition. But the route to delivery matters. A rigid insistence on onsite mitigation risks undermining both housing supply and biodiversity outcomes.
What is needed is a more balanced approach: onsite delivery where it adds genuine ecological and community value, complemented by robust offsite markets that can deliver at scale. This requires clear national guidance, consistent application across local planning authorities, and a recognition that land is finite and must serve multiple purposes – from food production to housing, energy, and nature recovery.
A Call for recalibration
BNG is still in its infancy and is currently being reviewed by DEFRA. Naturally there are challenges to work through and potentially some changes on the horizon. Our research will help to inform future change, providing the evidence that helps the industry to understand demand and opportunity. The current review is an opportunity for the Government to reconsider the bias toward onsite mitigation and ensure that the framework reflects practical realities.
Adjusted sensibly, BNG can underpin – not obstruct – the delivery of the new homes this country urgently needs. If the policy can evolve in this way, BNG has the potential to be genuinely world leading, delivering measurable biodiversity improvements while supporting, not stalling, the delivery of new homes.
Katy Davis is planning & development partner at Carter Jonas (London)