Biodiversity: the new net gain for landowners

England is known for many things - the Royal Family, Shakespeare, cream tea and its residents' inexplicable love of queuing, to name a few, but it's perhaps most famous for its landscape. Despite its relatively small size, the English countryside is extremely varied, particularly in relation to its biodiversity. But, if we want to preserve these habitats and encourage wildlife to flourish, official steps need to be taken, particularly in light of the country’s growing need to develop land.

How the race to keep England green has created new opportunities for land diversification

Any development on any land inevitably causes some harm to nature and reduces biodiversity. We need to reach a compromise where progress and development are not at the expense of protection for green spaces, wildlife and nature. The Government’s new biodiversity net gain planning requirements, which became mandatory in Spring 2024, aim to tackle this problem – and with it brings new opportunities for rural landowners to generate a diversified income stream from their land.

All new housing, commercial and industrial developments in England are required to ensure that any resulting biodiversity losses are offset entirely plus an additional 10% of net gain. They could do this themselves by enhancing their development sites with wildlife areas, tree planting, and so on. There’s also a credit scheme which developers can buy into from central Government, but that is more expensive and not generally preferred by council planning teams.

Biodiversity net gain banks

The third option – and this is where the opportunity lies - is to pay for someone else to designate some of their land in the locality for biodiversity. Landowners can set up schemes endorsed by their local planning authorities that provide a bank of biodiversity net gain (BNG) units ready for sale. They can then invite builders and developers to purchase them on the open market to offset the site requirements as and when they get planning permission.

Developers could either buy banks of units or buy them on a one-for-one basis as and when required. The landowner will typically have to enter into an agreement with the planning authority to confirm that they will tie the land up for 30 years for BNG. This is enforceable against any future owner of the land as a planning obligation. The owner will then enter into contracts with developers to sell the units on the open market.  

Seeking professional advice

Technical advice will be needed from ecologists, and sites will be checked by the local planning authority’s ecologists as to the site's suitability and ensure that it is being provided properly and managed appropriately.

There will also be ongoing monitoring to check that the proposed improvements have actually taken place, such as improving poor-grade land into good-quality woodland or wildflower meadows. There are different types of units, including woodland, meadows, and hedgerows, and there are different metrics for calculating the necessary area to constitute one bio-diversity net gain unit.

New and emerging marketplace

This is a new and emerging marketplace, and market values have not yet settled; however, we are now seeing schemes where bio-diversity units have been assessed in a value of £25,000 - £30,000 per unit, depending upon the type and quality.

BNG could be a real potential opportunity for farmers seeking to diversify and looking for a potentially passive income stream but who are not in a position to sell off land for development or do not desire to do so. There are land agents who specialise in this, and if you feel you have land suitable, we can support you with all legal advice.

For more information contact Richard Nixon on 0191 211 7924 or email [email protected]