Biodiversity net gain: a guide

Biodiversity net gain (BNG) is most definitely here to stay, with the vast majority of developments required to deliver a quantifiable improvement of at least 10% in biodiversity levels – this is known as the biodiversity net gain. The net gain is delivered by reference to a pre-development baseline. 

The requirement for new development to provide at least a 10% net gain is non-negotiable and secured by way of a pre-commencement planning condition on planning permissions – this is a deemed planning condition, and so the requirement for a 10% gain applies regardless of whether or not that condition is listed on the face of the decision notice. Note that BNG cannot be argued away on viability grounds - either at the point of issue of the planning permission or at a later date. This means that it is essential that those bringing forward land for development engage meaningfully with BNG at an early stage.

In order to provide BNG and so unlock planning permissions, developers have to secure the required BNG mitigation. If developers are unable to meet the BNG requirement on-site, they will need to look for off-site solutions which can include:

• providing BNG units off-site themselves, i.e. on alternative land within their control or

• purchasing BNG units from habitat gain sites which have been registered on DEFRA’s National Register or

• as a last resort, by purchasing government credits – note that these are purposely priced highly so as to disincentivise the use of this route.

From the perspective of landowners who may be considering establishing a habitat gain site on their land, where is the BNG regime headed in terms of there being a market for BNG units? The BNG regime continues to evolve and there are a number of recent developments which may have an impact on the market for units.

1. From a market perspective, there is an incoming change to how the spatial multiplier is applied when calculating the number of units which need to be allocated to provide mitigation in respect of each development site. From the end of 2026, BNG units will need to align with the local nature recovery strategy areas, rather than the local planning areas/national character area boundaries. This will broaden out the area to which off-site BNG units can be purchased, i.e. developers will be able to source off-site units in a larger local area, potentially making the BNG Unit market more competitive, with a wider pool of local off-site units available to them.

2. Secondly, the application of the BNG regime to NSIPs or ‘nationally significant infrastructure projects’ has recently been confirmed, and BNG will become mandatory for NSIPs from November 2026. NSIPs are the large-scale national infrastructure projects, covering, for example, major transport works such as highways or rail freight interchanges. Clearly the introduction of this requirement for larger projects will add to the need for BNG units.

3. To counter the above point, there is the introduction of the small sites exemption (for development sites of 0.2 hectares or below) which is coming into force for relevant planning applications made from 6 August 2026 (applicable unless priority habitats are present on site). The government’s response to the relevant consultation estimates that this change would result in a reduction of around 10% in the demand for off-site units – however, this reduction in demand may be mitigated by wider planning reforms.

4. The government has also trailed a possible BNG exemption for certain brownfield residential development.

When looking at BNG, our team can help with the following:

• Developers

  • We can help by working alongside your project team to develop and secure a comprehensive BNG strategy for your development and can advise on the implications and any risk associated with on-site vs off-site delivery.

  • Depending on the requirements of each development, we can negotiate any s106 agreements or conservation covenants required to secure BNG mitigation. We have experience of negotiating both and can advise on any potential risks, as well as the pros and cons of each approach.

  • Where you have historic or existing land agreements in place, we can undertake a review of existing provisions (including option agreements and promotion agreements) – The review will assess the impact of BNG, prepare BNG clauses for new agreements and assess the need for BNG whilst also setting the context for the costs associated with BNG within the promotion of land for development.

  • Assisting with the purchase BNG Offsite units from habitat banks and support with the reservation or purchase agreement offered.

• Landowners - Legal Agreements securing BNG units – we have considerable experience in preparing, negotiating and advising upon the legal agreements required to secure BNG units for registration on the National Register, either Section 106 Agreements or Conservation Covenants.

Biodiversity net gain: further detail on the process for developers

Following the grant of planning permission, you will be required to deliver no less than a 10% net gain in biodiversity levels (note that this assumes the planning application was made on or after 12 February 2024, which is the date on which the 10% gain became mandatory).

Biodiversity Gain Hierarchy

Although the requirement to deliver the net gain kicks in post the grant of planning permission, in reality BNG needs to be factored into any proposals from a much earlier stage due to the need for any mitigation to be secured in line with the Biodiversity Gain Hierarchy. This Hierarchy seeks to ensure that sustainable practices are an integral part of the planning process, starting from site selection.

The Hierarchy is set out in the BNG planning practice guidance and it requires that:

• first, in relation to on-site habitats which have a medium, high and very high distinctiveness (a score of four or more according to the statutory biodiversity metric), the avoidance of adverse effects from the development is to be prioritised and, if they cannot be avoided, those effects need to be mitigated

• then, in relation to all on-site habitats which are adversely affected by the development, the BNG mitigation measures should be prioritised in the following order (‘where possible’) – the enhancement of existing on-site habitats, the creation of new on-site habitats, the allocation of registered off-site gains and finally the purchase of biodiversity credits.

Note that the Biodiversity Gain Hierarchy is distinct from the mitigation hierarchy set out in the NPPF. Planning authorities must take into account how the Biodiversity Gain Hierarchy has been applied and if it has not been applied the reason for that or absence of a reason when determining whether to approve the Biodiversity Gain Plan (BGP).

Biodiversity Gain Plan

How is the BNG secured? The pre-commencement planning condition requires approval of a Biodiversity Gain Plan or BGP, and this sets out how you propose to secure at least a 10% net gain by reference to the baseline position. The BGP needs to set out how the BNG target of not less than a 10% gain will be met, and this can be by way of on-site delivery, off-site measures (including the purchase of biodiversity units) or through the purchase of statutory credits from the Government (or a combination of those).

The approval of the BGP is required before any development on the site can begin, and as such is a non-negotiable in terms of the development process. It needs to establish a clear and quantifiable framework for delivery of the biodiversity gain objective. There is no wriggle room, and the requirement for compliance cannot be argued on viability terms or varied by way of a section 73 application to amend or remove the condition.

For phased developments, there is a little flex in that an ‘overall’ gain plan needs to be submitted prior to the commencement of development. A separate BGP is then submitted alongside each reserved matters application, and the LPA is satisfied that the 10% net gain target will be met across the development as a whole. Note, however, that this does not allow for the requirement for delivery of meaningful net gain to be delayed until the final phases of development.

Biodiversity net gain: implications for landowners when establishing Habitat Gain Sites

As a landowner, you may have seen reference to ‘Habitat Gain Sites’ (HGS) or been approached about the potential use of your land to secure BNG units which can then be sold to developers.

A Habitat Gain Site is an area of land over which habitat creation or enhancement works are secured to provide BNG units. If you are considering this as an option, then it is important that the long-term implications are understood before proceeding with any proposal to use land in this way. Whilst BNG can provide financial incentives for landowners, pricing of those units is key and it is important to note that the BNG regime continues to evolve.

There are two legal mechanisms for securing such works – either a s106 agreement or a conservation covenant and we have experience of taking habitat gain sites through both legal routes. Once the legal agreement has been completed then the landowner can proceed to register the site on the National Register (and then sell BNG units on to developers).

Whilst Section106 agreements are enforceable by the relevant Local Planning Authority, Conservation Covenants are entered into with, and so are enforceable by, a ‘Responsible Body’. Under the s106 agreement/conservation covenant, you will be covenanting to enter into a habitat management and monitoring plan (HMMP) – this sets out how you will establish and thereafter maintain the habitat creation or enhancements. Once those habitat creation/enhancement works have been completed then you will need to maintain the land in accordance with the approved HMMP for at least 30 years, ie the establishment of a habitat gain site is a long term commitment which restricts the use of the land in the short to medium term.

The number of units generated is determined by the HGS’s scale and the nature of the enhancements. These units are calculated using a national metric to showcase the biodiversity value before and after the works.

If you want to use your land for this purpose, you can either begin habitat creation in advance of selling the units (utilising the service of a gain site broker), or you may create a bespoke habitat to meet the needs of a developer.

Given the maintenance period, there is the need to do a thorough cost-benefit analysis. The first step is to undertake a survey to engage an ecologist to establish the baseline value for your land, from this point the number of biodiversity units which could potentially be attributed to the site can be calculated by reference to that baseline. This calculation is achieved via the use of the DEFRA metric.

Before you can sell the units, they must be placed on the BNG national register and secured for 30 years from the date of completion of the works.  As and when the units are sold to developers, they will be allocated to a particular development and recorded against the habitat bank as such.

If you have a large habitat gain site, then you may want to consider creating the units on a phased basis and the s106/conservation covenant can be drafted to allow for this approach.

There are various cost implications with establishment and onward maintenance that need to be considered. Furthermore, thought needs to be given to the possibility of the site enhancements failing for whatever reason, resulting in a breach of the s.106 Agreement or Conservation Covenant.

To find out more about how we support developers and landowners with biodiversity net gain requirements, visit our Real Estate page or contact us today to discuss how we can help.