The Environment Act 2021 Schedule 14 introduced mandatory biodiversity net gain (BNG) as a planning condition for England. Developers and landowners must demonstrate that the biodiversity value of a site will be at least 10% higher after development than before it. The regime is measured using DEFRA's Biodiversity Metric 4.0 and applies to major applications from November 2023 and minor applications from April 2024.
What Is Biodiversity Net Gain?
BNG requires developers to leave nature in a measurably better state than they found it. The baseline is calculated by surveying existing habitats on site using Biodiversity Metric 4.0, which scores habitats by type, condition, distinctiveness, and strategic significance. The post-development score — after habitat creation, restoration, and management — must equal at least 110% of the baseline. If on-site measures cannot achieve 10% net gain, developers must purchase off-site biodiversity units from registered habitat banks or, as a last resort, buy statutory biodiversity credits from the government at a premium price set to incentivise on-site and off-site solutions first.
- Mandatory for major applications from 12 November 2023 (Town and Country Planning Act 1990 as amended by EA 2021 s.98 and Sch 14)
- Extended to small sites and minor applications from 2 April 2024
- Measured by Biodiversity Metric 4.0 — the statutory tool for calculating habitat units
- 10% minimum net gain is the floor; local planning authorities can require more
- On-site gains secured by a 30-year management and monitoring legal agreement or planning condition
Exemptions and Edge Cases
Not every development triggers BNG. The de minimis exemption applies where the development affects less than 25 square metres of habitat or 5 metres of linear habitats (such as hedgerows). Householder applications — extensions, outbuildings, and domestic garden works — are generally exempt. However, brownfield land does not automatically attract a lower baseline or exemption; if brownfield land supports notable habitats (mosaic grassland, scrub, ruderal vegetation), these are scored by the metric and can create a significant baseline that must be exceeded.
- De minimis: <25 sqm or <5m linear habitat affected — BNG not required
- Householder applications: exempt (planning extensions, outbuildings)
- Brownfield land: NOT automatically exempt if notable habitats present
- Self-build and custom-build: exempt
- Nationally significant infrastructure projects (NSIPs): separate regime under Planning Act 2008
- Permitted development rights: most PD categories exempt, but Class Q agricultural conversions are subject to BNG
On-Site Habitat Creation and Management
On-site BNG is the preferred route and should be designed into a scheme from the outset. A BNG plan — sometimes called a habitat management and monitoring plan (HMMP) — must demonstrate what habitats will be created or enhanced, how they will be managed for 30 years, and how compliance will be monitored. The plan is secured either as a planning condition or by a section 106 agreement. Landowners who retain the land after development may be obligated to manage it; if land is sold, the BNG obligation must be transferred and registered. Habitats must be maintained to target condition — failure to do so risks enforcement action and potential planning breach.
- HMMP required: 30-year management plan secured by condition or s.106
- Annual monitoring reports submitted to LPA for first 5 years, then at years 10, 20, and 30
- Habitat types that score highly: chalk grassland, lowland meadow, wet woodland, reedbeds
- Enhance existing habitats before creating new ones — condition improvement scores well
- Registration on Natural England's biodiversity gain sites register required for off-site units
Off-Site Habitat Banks and Income for Rural Landlords
Landowners with rural or semi-rural land can register habitats as a biodiversity gain site and sell biodiversity units to developers who cannot achieve 10% net gain on their own sites. This creates a new long-term income stream secured against land that may otherwise generate little return. To register, the land must be outside the application site, the habitat baseline must be independently assessed using Biodiversity Metric 4.0, and a 30-year legal agreement must be entered into with the local planning authority or Natural England. Unit values vary significantly by habitat type and location.
- Lowland meadow (good condition): approximately £30,000–£60,000 per biodiversity unit
- Hedgerow enhancement: approximately £15,000–£30,000 per 100m unit
- Wet woodland creation: approximately £25,000–£50,000 per unit
- Values depend on DEFRA's strategic significance multipliers and local demand
- Habitat bank registration via Natural England's biodiversity gain sites register
- 30-year legal agreement (covenant or s.106) — land encumbered for the term
- Income may be taxed as trading income or capital receipt — specialist tax advice needed
Statutory Biodiversity Credits
Where on-site measures and registered off-site habitat bank credits are both unavailable or insufficient, developers can purchase statutory biodiversity credits directly from the government via Natural England. These are priced at a significant premium to incentivise genuine habitat creation rather than credit purchases. The current price list was published by DEFRA and is reviewed periodically. Credits purchased fund conservation projects selected by Natural England. For landlords and developers, statutory credits are a last resort — they provide planning compliance but at considerably higher cost than private habitat bank units.
- Statutory credit prices set by DEFRA — typically 2–4× private off-site unit prices
- Available from Natural England's credit sales service
- Funds directed to strategic nature recovery projects nationally
- LPA must confirm off-site units not reasonably available before approving statutory credit use
- Purchasing credits does not reduce compliance scrutiny — BNG condition remains on planning permission
BNG and Property Development Appraisals
BNG obligations must be costed into development appraisals from the outset. Surveyors and valuers are increasingly required to consider BNG when assessing residual land values. A development site with a high-quality grassland or hedgerow baseline may have a significantly higher BNG obligation — and therefore lower residual land value — than a site of equal area with a degraded baseline. Conversely, a site with existing low-quality habitats that are easily enhanced on site may have a lower compliance cost. Failing to account for BNG in an appraisal risks viability shortfalls post-planning that can derail a scheme.
- Instruct an ecologist for a Phase 1 habitat survey at pre-application stage
- Run a preliminary Biodiversity Metric 4.0 calculation to estimate BNG liability
- Cost on-site habitat creation, off-site unit purchase, and 30-year management as separate line items
- Factor in monitoring costs over the 30-year management period
- Check LPA's local nature recovery strategy — strategic significance multipliers affect unit values
Frequently asked questions
Does BNG apply to all planning applications in England?+
No. BNG is mandatory for major applications (10+ homes or 0.5+ hectares) from November 2023 and minor applications from April 2024. Householder applications, de minimis developments affecting under 25 sqm, and self-build projects are exempt. Nationally significant infrastructure projects have their own BNG regime.
What is Biodiversity Metric 4.0?+
Biodiversity Metric 4.0 is the statutory calculation tool published by DEFRA and Natural England. It scores habitats by type, condition, distinctiveness, location, and strategic significance to produce a biodiversity unit figure. Developers must show a 10% increase in units between the baseline and post-development state.
Can I sell biodiversity units from my farmland?+
Yes. Landowners can register eligible land as a biodiversity gain site with Natural England and sell units to developers. The land must be assessed using Biodiversity Metric 4.0, and a 30-year legal agreement must be secured. Unit values for high-quality habitats such as lowland meadow can reach £30,000–£60,000 per unit.
What happens if a habitat bank fails to maintain habitats over 30 years?+
The 30-year legal agreement imposes ongoing management obligations. Failure to maintain habitats to target condition can result in enforcement action by the LPA or Natural England, potential liability to replace lost biodiversity value, and reputational damage that affects future unit sales.
Does BNG apply in Wales, Scotland, or Northern Ireland?+
The mandatory BNG regime under the Environment Act 2021 applies in England only. Wales, Scotland, and Northern Ireland each have their own environmental and planning legislation and have not yet implemented an equivalent mandatory BNG condition, though Scotland and Wales have voluntary frameworks and policy encouragement for net positive approaches.
How much does a Phase 1 habitat survey cost?+
A Phase 1 habitat survey — which classifies vegetation communities and identifies potential for protected species — typically costs £500–£2,500 depending on site size and complexity. It is the essential first step in calculating the BNG baseline. An ecologist will then use this data to run the Biodiversity Metric 4.0 calculation.