As we approach the new year, it’s essential for property developers and stakeholders to understand the implications of Biodiversity Net Gain (BNG) and how it will shape the future of development projects.
Understanding Biodiversity Net Gain
Biodiversity Net Gain is a principle that goes beyond merely reducing the negative impact of developments on natural habitats. Instead, it aims to ensure that new developments actively improve the natural environment. This concept is a cornerstone of the Environment Act 2021, which mandates that new developments must increase the variety of flora and fauna on the land.
Key components of BNG
1. Improving natural habitats: Unlike traditional approaches that focus on minimising harm, BNG requires developers to enhance the natural habitat. This means that any development project must leave the environment in a better state than it was before.
2. Legislative framework: The Environment Act 2021 enshrines BNG into law, making it a legal requirement for new developments. This legislation aims to ensure that biodiversity is a key consideration in the planning and execution of development projects.
3. Impact on land value: The requirement for BNG is expected to influence land values. Developers will need to conduct baseline surveys to determine the existing biodiversity units on a site and calculate the potential loss due to development. This process will affect the overall valuation and feasibility of projects.
4. Applicability to all sites: BNG is not limited to greenbelt or greenfield sites. It can apply to any development, including those located in urban areas. This broad applicability means that all developers must consider BNG in their planning processes.
5. Developable area: The implementation of BNG could reduce the developable area of greenfield sites. Developers may need to allocate portions of their land to biodiversity enhancements, potentially impacting the overall layout and design of projects.
6. On-site vs. off-site BNG: There is ongoing debate about whether BNG should be provided on-site or if developers can meet their obligations through off-site enhancements. This uncertainty adds another layer of complexity to project planning and execution.
Implications for developers
For property developers, BNG introduces a new set of considerations that must be factored into project planning and costing. Whether it’s a new build or an extension of an existing property, developers need to account for the costs associated with complying with BNG regulations. This includes conducting baseline surveys, implementing biodiversity enhancements, and potentially adjusting project designs to accommodate these requirements.
Financial considerations
Lenders financing development projects will also need to ensure that borrowers have accounted for BNG compliance costs in their project budgets. Valuation and feasibility reports must reflect these additional expenses to provide an accurate picture of the project’s financial viability.
Market impact
It is still too early to determine the full impact of BNG on the market value of land suitable for development. However, it is clear that BNG will be a significant factor in the planning and execution of future projects. Developers, lenders, and other stakeholders must stay informed about the evolving regulatory landscape and be prepared to adapt to these changes.
Comment
Biodiversity Net Gain represents a significant shift in the way we approach property development. By prioritising the enhancement of natural habitats, BNG aims to create a more sustainable and environmentally friendly future. As we move forward, it is crucial for developers, lenders, and other stakeholders to stay informed and prepared for the changes ahead.
Get in touch
At our firm, we are committed to supporting our clients through these transitions with a focus on trust, progressiveness, relatability, collaboration, and results. Together, we can embrace the opportunities presented by BNG and contribute to a greener, more sustainable future.
If you have any questions or need assistance with your development projects, please don’t hesitate to contact us via our online contact form or call 0330 111 3131.