Mandatory Biodiversity Net Gain for residential developers

Biodiversity Net Gain (BNG) aims to ensure that development enhances the natural environment rather than depletes it. As a residential developer, understanding BNG is crucial for sustainable and responsible construction practices. Here we list the key points for residential developers to consider:

1. Objective: BNG requires developers to ensure that habitats for wildlife are left in a measurably
   better state than they were before development took place.
2. Legal framework: in England, BNG is mandated under a statutory framework introduced by Schedule 7A of the Town and Country Planning Act 1990 (inserted by the Environment Act 2021),
   supplemented by a series of 2024 regulations. This framework distinguishes BNG from other
   general biodiversity gain requirements. Don’t assume you can negotiate the requirement to
   deliver BNG. Unlike most other planning requirements, there is no scope to advance special circumstance arguments to exclude the requirement.
3. Minimum gain: almost every grant of planning permission for residential development is
   subject to a condition that development delivers at least a 10% increase in biodiversity value relative to the pre-development state of the onsite habitat. This increase can be achieved
   through onsite biodiversity enhancements, registered offsite gains, or statutory biodiversity
   credits. Don’t forget some LPAs can require a greater than 10% gain.
4. Early planning: consider BNG requirements and how to deliver these at the earliest stage of
   development proposals.
5. Cost: understand the likely costs of BNG delivery on a site and factor these into price discussions.
   Where offsite BNG units are to be relied upon, understand what is available in the market before
   acquisition. There are cost and progress risks if these units are not available. When acquiring
   offsite BNG units or statutory biodiversity credits remember the spatial risk multiplier. This can
   have significant cost implications.
6. Onsite or offsite: when acquiring or optioning land, consider the need for any additional land to
   meet development BNG requirements. Also consider BNG strategically across your portfolio.
   There may be opportunity to, for example, use BNG generated on one site to support other sites,
   however this must be carefully planned from the outset.
7. Habitat type and quality: understand any ‘difficult’ features of a site such as irreplaceable
   habitats and high or medium distinctiveness habitats and consider how these will be dealt
   with through the BNG process before committing to an acquisition.
8. Maximise onsite BNG: consider design of sites to maximise onsite BNG opportunities, where it is cost-effective to do so. Embracing BNG benefits might reduce developable land, but that loss can be offset by place making and building a community environment that benefits residents. But when BNG on a development site is proposed to be used to support development elsewhere, plan this carefully to avoid overcommitting the BNG to the onsite development and losing the ability to register units for use offsite.
9. Submission process: once planning permission is granted, a Biodiversity Gain
   Plan must be submitted and approved by the planning authority before development commences.
10. Retain control: if you intend to generate credits for sale or use on other sites ensure your plot set up is flexible to achieve this. A 30-year management plan will need to be put in place during which time land will need to be managed and may not be accessible to residents. Do not grant general rights to use these areas in plot transfers and consider management company structures and how value for credits can be extracted.
11. Statutory credits: don’t assume you can rely on statutory biodiversity credits. To obtain these you need to evidence both that BNG is not possible to achieve onsite and evidence that offsite BNG providers have been approached and are unable to provide the required units.
12. Tax: take advice as to the tax implications of any BNG strategies at an early stage if you intend to create and sell BNG credits, that may lead to you or a residents management company trading.