Delivering Biodiversity Net Gain through Habitat Banking

A landowner uses a habitat bank to deliver Biodiversity Net Gain, generating income and supporting nature recovery through legal agreements.

Biodiversity Net Gain (BNG) is a policy introduced by the Environment Act 2021, requiring new developments in England to result in at least a 10% increase in biodiversity compared to the pre-development baseline. This is achieved by creating and managing new habitats for a minimum of 30 years, ensuring that development not only avoids further habitat loss but actively restores biodiversity.

What is a Habitat Bank?

A habitat bank is an area of land where new habitats—such as meadows, woodlands, hedgerows, and ponds—are strategically created and managed for the long term. These sites generate measurable biodiversity improvements, which are translated into Biodiversity Net Gain Units (BNG Units). Developers can purchase these units to meet their planning obligations.

Our Role and Approach

Our team worked with a landowner to establish a habitat bank, supporting the negotiation and completion of an option agreement. This enabled the client to become a habitat manager and long-term custodian of the site. The work involved navigating new legal territory for the firm, particularly around issues such as mineral and sporting rights owned by third parties, tenant occupation and developing practical solutions for long-term habitat management.  The site features a natural stream, which not only enhances its ecological value but also provides a focal point for biodiversity. Plans are underway to establish wildlife corridors through carefully managed planting scheme.

Property Partner, Emma Ridge explains; “The project represented a new type of work, with some unique challenges. The process provided valuable insights into how BNG documents and agreements operate in practice, offering lessons that can be applied to future cases. We believe the results demonstrate the team’s expertise in this emerging field”.

Outcomes

The option agreement was successfully completed, enabling the creation of a habitat bank. The client is now positioned to manage the site for biodiversity enhancement, with the potential to sell BNG Units to developers seeking to fulfil their BNG obligations.

Wider Context and Impact

BNG is transforming the landscape for landowners and developers. Landowners can participate by creating habitat banks and selling units, or by leasing land to third-party operators who manage the habitat and sell units on their behalf. Each approach carries different levels of risk and reward, but all contribute to the national goal of restoring biodiversity.

Recent industry reports highlight the rapid growth of the BNG market, with over 200 habitat banks in development across England and nearly £3 billion in projected market value by 2035. Habitat banks are now a key mechanism for delivering BNG, especially for developments unable to achieve gains on-site.

This case demonstrates how legal expertise and practical problem-solving can enable landowners to play a vital role in biodiversity recovery. By establishing habitat banks and navigating the complexities of BNG agreements, our team is helping clients to generate an income stream whilst contributing to a more sustainable future.

For further information about our services for landowners, please visit Natural Capital web page.

If you have any questions or we can assist, please contact any member of the agriculture and rural property team on 0113 244 6100.

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The information in this article is necessarily of a general nature. The law stated is correct at the date (stated above) this article was first posted to our website.

Specific advice should be sought for specific situations. If you have any queries or need any legal advice please feel free to contact Wrigleys Solicitors.