Following on from our article regarding landlords and property developers going green to keep ahead of the competition, we are continuing the green conversation as we explore the Biodiversity Net Gain (BNG) scheme – due to come into force this year!

Back in 2021, the Environment Act was passed by parliament in a bid to improve biodiversity in England and Wales. This included a new stipulation that developers are to improve the biodiversity of new property developments by a minimum of 10%. The objective is to ensure all new projects contribute to the recovery of nature and make sure that wildlife and habitats are in better shape than before the build began.

The Department for Environment, Food & Rural Affairs states that all Land Managers, Developers and Local Planning Authorities are duty-bound under the requirements set out by the BNG and everything can be recorded using the online service, available from November 2023.

Property industry issues

The difficulty the property development market is seeing, however, is that with the regulations meant to be coming into force soon, the government has yet to release the full details of how the BNG scheme will work and any specifics around requirements – a headache for both developers and their legal teams alike.

Partner at law firm BDB Pitmans, Angus Walker said: “In its consultation response in February, the government listed a lot of things it was going to do between then and November, and it doesn’t seem to have done any of them yet”.

The reassuring thing as we currently stand however, is that any existing or new applications before the scheme is in place will for the most part be unaffected as the scheme will apply to developments after the fact. As such property developers would benefit from getting projects off the ground sooner rather than later.

Biodiversity Net Gain Scheme – the facts!

What we do know is there will be three ways in which property developers can quantify the delivery of the BNG. From November, one of the following options must be abided by as a legal requirement (information sourced from Property Week):

Onsite units
The first, and some might argue, the ideal, option to meet BNG requirements is to opt for onsite units. This is where an area of land that is inside the development can meet the commitments needed under the BNG scheme. The area must be equal in size or net gain to the estimated loss of biodiversity from the development plus a 10% uplift, which can be delivered through habitat creation, enhancement, landscaping or green infrastructure.
Offsite units
An offsite unit is an area of land either owned by or managed on behalf of a developer, which is used to increase biodiversity on a plot away from the development site when BNG cannot be delivered along with the scheme. The register of land available for offsite units is being overseen by the government and was due to be ready six months before the rules came into force.
Statutory credits
Intended as a last resort for developers, statutory credits are designed to be used only when BNG cannot be delivered on or off-site via the market. Statutory credits are made available by the government. This may well be the primary option for smaller developments where space is at a premium and buying offsite is not an option. Exact figures are yet to be published but additional costs such as these can and will be built into any borrowing by property developers.

What are biodiversity units?

Biodiversity units can be measured using a biodiversity metric that calculates the size of the habitat, its quality and location. More specifically, the Department for Environment, Food & Rural Affairs states you need:

The types of habitat - on-site and off-site
The size of each habitat parcel in hectares - or kilometres if it is linear (rivers and streams, hedgerows and lines of trees)
The condition of each habitat parcel
Whether the sites are in locations identified as local nature priorities.

More information on the biodiversity unit calculator is on the government website here and a tool can be downloaded from Natural England here.

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