Under the Environment Act 2021, most new developments in England must achieve a 10% increase in biodiversity, ensuring that habitats are left in a measurably better state than they were before construction.
According to Price Bailey, a ‘Top 40’ firm of accountants, this presents a major opportunity to farmers and landowners. Landowners who actively create or enhance habitats such as meadows, woodland, and wetland can generate an independent income stream, through the sale of ‘biodiversity units’, to developers who cannot otherwise meet their BNG obligations on-site.
Gary Frear, Agricultural specialist at Price Bailey, comments: “Now is a great time for farmers to act, because BNG is approaching a pivotal moment. As the Basic Payment Scheme (BPS) is phased out under the Agricultural Transition Plan, farms across England face significant income loss. Environmental Land Management schemes (ELMs) are still evolving and oversubscribed. At the same time, developers are under growing pressure to comply with environmental standards, pushing up demand for off-site BNG credits.”
According to Price Bailey, DEFRA has set eye-catching statutory prices for its own credits, ranging from £42,000 to £650,000 per unit. This is encouraging developers to seek more cost-effective deals with private landowners.
Gary continues: “Developers can meet BNG requirements in three ways: on-site (within the red line of the development), off-site (elsewhere), or by purchasing statutory credits as a last resort. The off-site market is where landowners can step in, provided they register their land on the national biodiversity gain site register and enter into a legal agreement securing 30 years of habitat maintenance.”
BNG is now a fundamental part of the development system. All major development applications must demonstrate how they will achieve their biodiversity uplift, whether on-site, off-site or via statutory credits. Local authorities are increasingly requiring developers to evidence these commitments early in the planning process, before consent is granted.
Gary concludes: “A well-designed BNG site, properly registered and transparently managed, could become a valuable asset for farmers and landowners across the UK.”
For more information, visit Price Bailey here.
