Our Natural Capital team has looked at how this regulatory shift is reshaping the development landscape and its direct implications for landowners and institutional real estate investors.
BNG is not purely a compliance obligation—it is a strategic consideration that can influence planning risk, enhance Environmental, Social and Governance (ESG) performance, and potentially improve exit values. Developments that successfully integrate BNG may benefit from more streamlined planning approvals, stronger alignment with ESG frameworks, and increased appeal in urban markets where access to greenspace is limited.
In parallel, BNG is creating new opportunities for nature-based investment, including habitat banks and biodiversity unit markets. These assets offer co-benefits such as carbon sequestration, flood resilience, and enhanced amenity value—supporting both environmental and financial outcomes.
Institutional investors who proactively embed BNG into land acquisition, development design, and delivery strategies will be better positioned to mitigate risk, meet regulatory expectations, and capitalise on emerging nature-positive investment trends.
There is a wide variation among developers in their approach to BNG, with some committing significant time and resource to develop BNG strategies since 2020 and others dealing with it on a project-by-project basis. We are seeing a growing number of developers considering partnerships with biodiversity unit suppliers to facilitate securing biodiversity units with minimal delays. Our nationwide coverage of high-quality habitat banks generating a vast quantity and diversity of biodiversity units makes us well-placed to participate in such partnerships and supplier frameworks.
Innovative solutions
Last year we launched a 173-acre BNG scheme in partnership with Braxted Park Estate which is uniquely located where three Local Planning Authorities (LPAs) converge in Essex. Due to the spatial risk multiplier in the biodiversity metric, developers are incentivised to secure any off-site BNG requirements within the same LPA or National Character Area as the development site, otherwise they need to purchase more biodiversity units. Therefore, having a BNG scheme that sits within three LPAs has significant implications on the ability to provide cost-effective solutions to developers across a wider coverage.
We developed an innovative approach to securing the scheme that was robust and cost-effective, agreeing to have a ‘Lead LPA’ whereby the other two LPAs delegated their powers of enforcement to the Lead LPA, simplifying the compliance requirements for the landowner. This was the first registered BNG site to have a single s106 agreement with multiple LPAs and was a huge achievement for the estate, demonstrating how we are leading in this field.
Bespoke schemes
In late 2025 we completed a pioneering sale of biodiversity units from two BNG schemes that we developed specifically to meet the off-site BNG requirements of Network Rail’s East West Rail improvements from Bicester to Bedford. The schemes at Manor Farm, Buckinghamshire, and Woolley Downs Nature Recovery, Oxfordshire, were developed from inception to implementation, brought forward in response to a lack of suitable existing habitat banks able to meet the scale, location and habitat mix required by Network Rail. A particularly challenging habitat for Network Rail to offset was lowland calcareous grassland as this was not a local habitat type in this region and had formed due to the railway line being carved into the earth and exposing calcareous substrate.
Large infrastructure projects often face challenges in sourcing appropriate off-site BNG, particularly where proximity and habitat distinctiveness are critical. In this case, we worked directly with the landowners to design bespoke schemes that met Network Rail’s requirements, while also creating scalable habitat banks capable of aggregating funds from other developments to deliver greater environmental benefits.
These projects highlight how bespoke, landowner-led solutions can play a critical role in the BNG market.
An evolving legislation
The government acknowledge that BNG is a world-leading policy and are committed to maintaining BNG as a statutory requirement. Nevertheless, it is recognised that the policy presents challenges for small and medium sized (SME) developments and brownfield developments that can result in project unviability.
Consultations were held last year that considered proposals to extend exemptions, simplify the small sites metric and increase the ease of access to the off-site BNG market. This is expected to make it easier, quicker and cheaper for SME developers to deliver BNG requirements and resolve the specific challenges for brownfield developments.
Our anticipated implications on BNG market participants were the proposals to be officially implemented are set out below:
• Although making up most planning applications, SME developments often have little to no BNG deficit. Where there is a deficit, this is usually for a fraction of a biodiversity unit which is inefficient and not cost effective to transact. Therefore, we expect to see a reduction in the very small, fractional BNG requirements that are of very low value.
• Brownfield developments can be caught out with the presence of higher distinctiveness habitat such as ‘open mosaic habitat’ which is particularly challenging to offset on- or off-site. We have already seen LPAs accept deviations from the BNG trading rules to facilitate offsetting with alternative habitat types and expect this will continue to create local solutions.
• A medium sized site category for 10-49 units (or up to 2.5 ha) may be created which could fall into the proposed BNG exemptions and simplifications, which could potentially lead to significant reductions in off-site BNG demand.
• The new rail and densification policies are expected to unlock a potential 1.8m homes in the coming years and decades, which could increase off-site BNG demand.
• Limiting the circumstances in which plan-makers can seek BNG contributions that exceed the statutory requirement to be more proportionate and site-specific, will only affect those regions where LPAs have set, or are planning to set, higher BNG requirements. These regions may see a reduction in off-site BNG demand where requirements are reduced back to the statutory 10% BNG.
• The BNG policy will soon apply to Nationally Significant Infrastructure Projects (NSIPs), which is expected to increase off-site BNG demand.
We eagerly await the full consultation response and implementation timeline expected to be published early this year.
