How rural landowners can benefit from biodiversity net gain

Opportunities for rural landowners to generate income by delivering habitat enhancement for developers to meet their Biodiversity Net Gain (BNG) obligations for new planning applications in England are steadily increasing, with the number of Habitat Banks - BNG sites selling Units commercially - seeing a rapid uptick in the second half of 2025.

There are now more than 110 sites across the country, and that number is rising.

Introduced in the 2021 Environment Act, BNG mandates that developers leave the natural environment in a measurably better state post-development.

In a recent podcast hosted by Brown&Co Agri-Business Consultant Olivia Burfoot, the firm’s Principal Ecologist Ryan Clark said that, in practical terms, BNG legislation and guidance had implored planning applicants to consider their biodiversity and ecology impacts early on in the process.

It had also introduced a need to commission specific assessments that ensure the 10% BNG uplift thresholds are met.

“If they don’t meet the BNG rules they won’t meet their planning compliance,’’ Ryan explained.

Common routes used to achieve these mandatory thresholds include grassland enhancement via the sowing of seed mixes, the planting of trees, and inclusion of features such as ponds and stands of reeds.

Opportunities for farmers, landowners and land managers arise when certain developments are unable to achieve the BNG obligation within their application boundary, or other land that they own or steward. 

In these circumstances, the only options to satisfy the legal obligation are to buy Units commercially from a Habitat Bank or to purchase Statutory Credits from the government that are intentionally expensive – at a minimum they are twice the cost of Units.

“Under the same system in place for developers, they can enact an uplift on their land and sell those Units commercially,’’ said Ryan.

The commercial sale of BNG Units is steered by local authorities to remain within relative proximity to the development site; selling of Units outside of local planning authority areas or National Character Areas is penalised to varying degrees.

The practical implementation of enhancements within Habitat Banks can be as simple as converting existing areas of arable to grassland or enhancing existing ponds and woodland through targeted planting. 

Further opportunities emerge from potential to enhance watercourses - rivers, streams, and even ditches - to generate Watercourse Units; these can be sold separately in the same manner as BNG Habitat Units.

Ryan said the most common habitat within Habitat Banks is currently other neutral grassland (ONG) - a mid-distinctiveness grassland sward that generates a significant BNG Unit yield, is relatively easy and cost-effective to implement and manage, and has the advantage of being strongly parallel in terms of the composition, condition and management needs of many existing agricultural field margins.

A generally popular and effective strategy is to mix a more common habitat such as ONG with a higher distinctiveness habitat - orchard or reedbed for example.

This diversification of habitat types allows Habitat Banks to sell to developers with different BNG needs which they need to satisfy to meet their planning obligations.

The process of setting up a Habitat Bank is lengthy with hurdles to overcome, and which can be demonstrated by multiple options for legal enshrinement of the agreement and detailed prescriptions within Habitat Management and Monitoring Plans (HMMP).

“Nevertheless there are still lots of schemes going in and numbers have jumped considerably in recent months which tells us that there are probably more in the pipeline,’’ said Ryan.

Unit prices, Ryan observed, have held steady with Units derived from habitats such as ONG trading at approximately £25,000/unit – a landowner can expect to generate an average of 8-10 units per hectare from arable or pastural land.

Other habitats such as orchard and woodland attract net average Unit prices of approximately £35,000-£45,000 but are generally required in lesser quantities by developers and form part of bespoke deals.

Looking forward, Ryan believes the BNG market will continue to be characterised by “tentative and steady’’ growth over the next few years.

BNG remains a worthwhile diversified option alongside other environmental schemes and land-based income sources, he said.