Biodiversity Net Gain was formally introduced into law in February for major developments, and from April for small sites, now affecting all new housing development planning applications, excluding Nationally Significant Infrastructure Projects (due November 2025). Samantha Hursey of Meadfleet looks at how the new legislation is affecting residential development.
BNG was introduced as part of ambitious plans to improve the natural environment and protect biodiversity. The regulations stipulate that a development must leave the environment in a demonstrably better condition than before.
Key benefits of the initiative include cleaner and greener areas to live and work, more habitats for wildlife to thrive, improved natural flood protection and a positive impact on the effects of climate change.
BNG requires an increase in the biodiversity value from the baseline assessment of a site to a measurably better state by a minimum of 10%. Efforts must be made to ensure Biodiversity Net Gain can be achieved on the development, however if this is not feasible in its entirety, then it can be achieved elsewhere off-site.
The developer can secure the unit shortfall by securing additional land for net gain, or from appropriate sites from other landowners. Off-site land will need to meet the criteria of the biodiversity gain sites register. A developer can purchase statutory biodiversity credits from government as a last resort which will be invested in large scale, high value, habitat projects.
What insights have been gained since the implementation of the regulations in February? Stakeholders, such as housebuilders, local planning authorities (LPAs), and ecological consultants, are navigating these regulations with a diverse range of experiences. There does not appear to be chatter of a bottle neck in planning application approvals, which could suggest that there is either minimal scrutiny over the new complex proposal requirements or alternatively that developers are having difficulty achieving planning conditions, for the reasons outlined below.
For offsite land to be registered on the biodiversity gain sites register a Section 106 agreement or Conservation Covenant must be in place. S106 agreements can be put in place to legalise the management of land within the LPA area as part of the granting of planning permission for a development. However, some LPAs do not appear to have the capacity or process in place for a third party to obtain a S106 agreement outside of a planning application for the sole purpose of habitat creation / enhancement for the provision of Biodiversity Units.
Currently very few organisations have registered with DEFRA as Responsible Bodies to agree Conservation Covenants with landowners. Therefore, there may be a delay in sites being able to be registered and allocated to a development. At the time of writing there were just 4 sites listed on the biodiversity gain sites register, 3 months after the launch of the legislation, with 5 responsible bodies approved.
The costs of setting up legal agreements are also still not fully known but there has been feedback of set up fees, management plan fees, monitoring fees and legal fees ranging between £9k-15k. With the average cost of a unit around £25k this would suggest the system seems geared towards large habitat banks rather than enabling landowners to cost effectively register smaller numbers of units or multiple sites.
An additional challenge is sourcing units with the same broad habitat type of a similar or higher distinctiveness and condition than that lost from the development land to demonstrate a 10% gain. Penalties can be imposed for units outside of Local Planning Authority for the development, encouraging offsite habitat provision close to the development.
In an ideal world, and in line with the legislation’s hierarchy, developers will fulfil the gain on the footprint of the development site, retaining and enhancing existing habitats. However, in most cases this is unachievable as inevitably a significant percentage will be built on, this can have a knock-on effect on the number of units that can be constructed or may add a requirement to purchase additional adjacent land to meet the requirements (or both).
A lack of an established marketplace and availability of units across LPA areas will also result in developers having trouble finding suitable off-site land without utilising the services and associated costs of land agents and larger habitat bank companies. All resulting in a potential decrease in the developer’s profit margins.
Other factors to consider when using onsite areas for BNG include the ongoing management cost and how this will be covered. Additional areas of open space which require specialist monitoring and reporting can increase costs either to the housebuilder or the residents. Consideration must be given as to whether BNG areas should be accessible by residents or kept fenced off and what affects this may have on not just management costs, but also whether it will impact resident buy-in and the value of the habitats. Education is key in ensuring homebuyers are not put off by a different type of landscaping than they may be used to.
Whether developers utilise offsite or onsite solutions, as BNG requires a minimum 30-year commitment then the developer must demonstrate in their proposals that appropriate arrangements are in place for the ongoing management and monitoring of habitat to achieve the 10% gain over the required period.
Housebuilders require an ongoing management solution that protects their legacy with proven in-house expertise and experience to meet all the requirements of the legislation. A collaborative approach is beneficial, so that all parties can work together through the process to meet the various challenges with positive outcomes.
Meadfleet have been voluntarily improving the biodiversity value of the open spaces in their existing portfolio for some time now. Areas have been assessed and enhanced following the process of Biodiversity Net Gain. Whilst not compulsory on historic developments, this demonstrates how Meadfleet’s approach to open space management combined with customer education and engagement, will ensure the success of Biodiversity Net Gain on future projects on behalf of housebuilders.