BNG credits and the off-site market

BNG credits and the off-site market

“Biodiversity Net Gain (BNG) is now mandatory for planning applications for both major and minor developments. Developments that cannot create the required 10% BNG on-site will be able to purchase BNG units via a private off-site market or, as a last resort, statutory BNG credits from Natural England”, explains Henry Buckpitt of Acorn Rural Property Consultants.

“Under the BNG metric, habitats that are destroyed or degraded are scored to determine the unit value of what has been lost which must be replaced with the required number of units of similar or higher value habitat. High scoring habitat (such as mixed scrub) can not be replaced with lower scoring habitat (such as modified grassland). This means that, as the offsite BNG market develops, there will be a demand for a range of habitat unit types”, continues Buckpitt.

“BNG unit values will need to cover costs associated with initial habitat creation or enhancement works, monitoring and reporting, management of the land over at least 30 years, consultant and ecologist fees and a value to reflect the perceived value to the landowner of entering into a legal agreement not to use the land for any other purposes. Currently BNG units are being offered for sale at between £25,000 and £75,000 depending on habitat type. However, in an open market, values will not exceed the price at which any particular development ceases to be financially viable”, says Buckpitt.

“Statutory BNG credits can be purchased from Natural England as a last resort where developers can demonstrate that they can not provide BNG on-site and can not purchase off-site BNG units. To ensure they remain a last resort, they have been priced at a level that makes then broadly 4 or 5 times the cost of sourcing them in the private market and they currently range in price from £42,000 to £650,000 per credit depending on habitat type. Where on-site BNG creation is not possible, there will therefore be a significant incentive for developers to purchase BNG units from the private sector”, concludes Buckpitt.

For further information please contact Acorn Rural Property Consultants on 01884 212380.

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