What does the disparity in take-up and implementation of BNG mean for the sector?

Such figures illustrate just how critical land access and strategic planning are to fulfilling BNG, and why capacity varies so widely across the country. By its very nature, the UK is an ecologically diverse landscape. Ancient woodlands, chalk grasslands and coastal salt marshes are present, as are high-density urban environments, brownfield and heavily constrained sites. As such, there exist very different capacities for meeting BNG criteria both on and off-site. 

There are also significant differences between habitat types. Notably, when measuring the biodiversity value of existing land, the contrast between greenfield and brownfield land is not as pronounced as many anticipated. While greenfield sites have an average baseline of 3.60 BU per hectare, brownfield sites typically sit at 3.17 BU per hectare. 

This can sometimes spell trouble for affordable housing, which is often constructed on brownfield land. Though such sites may benefit from existing infrastructure and be perceived as more sustainable, their constrained size offers limited opportunities when it comes to providing BNG on site. Under current policy, there are no “biodiversity discounts” for such schemes. 

While many habitat banks have come to the market over the last 18 months, others are still a work in progress, and delays to Local Nature Recovery Strategies (LNRS)  – which, once in place, could further shape the value of BUs – mean that developers are in danger of falling behind delivery targets. 

At present, biodiversity units can be sourced from across the country, but the spatial risk multiplier favours and supports local delivery. However, should LPAs begin to press for BNG to be delivered strictly within their own boundaries, the options available to developers will narrow considerably, placing even greater pressure on costs and locations where land and habitat banks are already stretched. 

Our report reveals that 54.7% of developments are delivering BNG entirely on site. While this may be within reach on some sites, it is not always realistic. Where on-site provision is not possible, developers are instead turning to off-site solutions – whether through their own land holdings, the purchase of BUs from third-party providers, or, as a last resort, through the national statutory credit scheme, though evidence suggests the latter option is rarely used, presumably due to the prohibitive costs involved. 

With the government aiming for an ambitious target of 1.5 million homes within five years, demand will inevitably increase exponentially. On site, this may pose issues in relation to density and viability, while off site, requirements may well exceed supply, at least initially. 

For affordable and social housing, cost sensitivity is a constant concern. With disparity across the UK – particularly in densely built-up zones, where the necessity for these homes is arguably at its highest – premium prices for off-site BUs threaten project feasibility. And for smaller developers and housing associations especially, absorbing these additional costs will prove increasingly difficult. 

If BNG is to fulfil its potential, delivery must be achievable on a national scale, not just where favourable conditions already exist. Strategic co-ordination and the timely publication of LNRS will be essential. Without these, disparity will persist, jeopardising much-needed housing delivery, including affordable and social housing, and BNG will risk becoming something of a postcode lottery. A consistent framework, grounded in practicality, is the only route to achieving fair, functional outcomes across the country. 

Richard Holliday, associate partner, Carter Jonas