Why developers buy biodiversity units
Most planning permissions in England must deliver at least a 10% biodiversity net gain, measured with the statutory biodiversity metric. Where a developer cannot achieve that on its own site, it can buy off-site biodiversity units from land managers. Statutory credits sold by the government are a last resort, deliberately priced so they do not undercut the private market.
That creates a market for farmland. A landowner creates or enhances habitat, such as species-rich grassland, wetland, hedgerows or woodland, and sells the resulting uplift in units to developers who need them.
How it works
- Baseline surveyAn ecologist surveys the land and records its existing habitats in the statutory metric. Arable and improved grassland usually score low, which leaves room for uplift.
- Habitat planYou decide which habitats to create or enhance, and the metric calculates the units they will generate. Habitats that the local nature recovery strategy identifies as important for your area score more highly.
- Habitat management and monitoring planA plan setting out how the habitats will be created, managed and monitored, agreed with the council or the responsible body.
- Legal agreementThe habitat must be secured for at least 30 years, through a planning obligation (a section 106 agreement) with the local planning authority or a conservation covenant with a responsible body.
- RegistrationThe site is entered on Natural England's biodiversity gain site register. When units are sold, they are allocated to the development on the register, which prevents double counting.
Location matters
The metric applies a spatial risk multiplier, so units are worth more to a developer when the gain site is in the same local planning authority area or national character area as the development. Demand depends on how much development is planned nearby and on how few opportunities developers have for on-site gain. Land close to growing towns, or in areas with major allocations, is usually best placed.
The rules changed on 6 August 2026. Developments on sites of up to 0.2 hectares no longer need mandatory net gain unless priority habitat would be harmed, which removes some small buyers. At the same time, minor developments that are not exempt can now consider off-site units alongside on-site options, rather than having to put on-site gain first, which makes it easier for them to buy units. Net gain also applies to nationally significant infrastructure projects applied for from 2 November 2026, a new source of demand.
Does creating habitat need planning permission?
Changing farmland to grassland, scrub or woodland is generally not development. Some works can be, however. Ponds, scrapes, bunds and new access tracks may be engineering operations that need planning permission. Large-scale tree planting, or works to uncultivated land, may need an environmental impact screening decision first, and the government advises landowners to check this before registering a site.
Planning matters at the other end too. The section 106 route involves the council directly, and the council's ecologists will scrutinise the metric and the management plan. A habitat bank on land that is allocated, or is likely to be promoted for development, can rule out future options, so the planning prospects of the land should be weighed first.
Points to settle before committing
- The 30-year commitmentThe habitat must be maintained for at least 30 years after the enhancement works are complete. The obligation binds the land, so it affects future sales and lending.
- TenanciesWhere land is let, the landlord and tenant both need to agree, and the tenancy may need to change.
- Other schemesYou can combine units with some other environmental payments, but you cannot be paid twice for the same work. Habitat that is already required, for example to restock felled trees, cannot be sold as units.
- Tax and valueA long-term habitat obligation can affect land value and tax reliefs. Take specialist tax and valuation advice.
- Selling the unitsUnits can be sold directly to developers, through brokers, or by working with a habitat bank operator who takes on some of the management and risk.
Local planning advice
Frequently asked questions
Can farmers sell biodiversity net gain units?
Yes. A landowner can create or enhance habitat, secure it for at least 30 years through a section 106 agreement or a conservation covenant, register the land on Natural England's biodiversity gain site register, and sell the units to developers who need them to meet the 10% net gain requirement.
How long do I have to manage the habitat?
For at least 30 years after the habitat enhancement works are completed, under a habitat management and monitoring plan secured by the legal agreement.
Do I need planning permission to create a habitat bank?
Changing farmland to habitat is generally not development, but engineering works such as ponds, bunds and tracks may need planning permission, and some planting or works on uncultivated land may need an environmental impact screening decision.
Where are biodiversity units most valuable?
Close to development. The statutory metric reduces the value of units bought from outside the development's local planning authority area or national character area, so land near growing towns or major allocations is usually in greater demand.
Did the 2026 changes affect the market for units?
Yes. From 6 August 2026, developments on sites of up to 0.2 hectares are exempt unless priority habitat is harmed, but minor developments that are not exempt can now consider off-site units alongside on-site options.
This guide is general information for applications in England and is not advice on your specific project. Requirements differ in Wales, Scotland and Northern Ireland, and every council publishes its own local validation list, so always check the detail with your local planning authority.