As part of the Autumn Budget 2026, the Government announced that residential development on brownfield sites of up to 1.5 hectares in England will be exempt from biodiversity net gain (BNG).
This is a substantial change to the previous criteria - an exemption for sites of 0.2 hectares or less applies to planning applications made from 6 August 2026, so the new ceiling of 1.5 hectares is materially higher and therefore has potential to cover a significant number of development sites.
Here is what we know so far:
- The development must be residential – therefore commercial developments remain within the previous scope, and the treatment of mixed-use land is unclear at this stage;
- The land must be “brownfield” – this is not yet defined, but it is apparent that the history of the land is relevant (e.g. previous development/commercial use is likely to point to a brownfield classification);
- The site must be no more than 1.5 hectares; and
- The exemption applies in England only.
However, there is a lot of detail yet to be provided, and it is important to note that no start date for the new criteria was given in the Budget. The consultation response, impact assessment and implementation timetable are still to come, so the 10% uplift in biodiversity value requirement (which came into force in 2024) and the pre-commencement biodiversity gain plan continue to apply for now.
What it means for developers and the market generally
- Our expectation is that brownfield sites of 0.2 to 1.5 hectares with a clear development history will look more attractive, and therefore there is likely to be more competition for them, and more argument over what counts as brownfield.
- Fewer schemes will need BNG units meaning there will be less demand for habitat banks and off-site units.
- We understand DEFRA believes the impact of the legislation will be substantial, with far fewer delays and costs being incurred by SME developers due to BNG issues. The logic behind the legislation is that that BNG on brownfield land is more complex and proportionately more costly than on greenfield, especially where open mosaic habitat (a unique type of habitat found predominantly on brownfield sites) is present. Removing it cuts cost and risk for small and mid-sized urban schemes. However, the true impact remains to be seen.
- Whilst this is a positive move, the change does nothing about rising construction costs and the affordability of development finance – the legislation will help, but further changes are needed to radically improve housing delivery in the UK.
What to do now
- The current requirement applies until the exemption does, and an announcement does not waive a biodiversity gain plan, so continue as per previous legislation for now.
- Build evidence of history - Gather the site's development history and evidence of lawful buildings or structures.
- Ask your solicitor to review any agreements which include provisions relating to biodiversity legislation. For acquisitions, options and promotion agreements, consider conditions, price adjustments or overage tied to whether the exemption applies.
- Take advice on timing - It is important to note that transitional provisions have not been published, so we strongly recommend you discuss this change with your planning consultant before submitting your planning applications, as the potential saving resulting from waiting until the new regulations come into force could be substantial.
We will update this article when the consultation response and draft regulations appear. This article is general information, not legal advice.
If you would like any more information then please do not hesitate to contact the writer, Matthew Bell, Senior Associate in our Commercial Property Team.