Biodiversity Net Gain: recent changes and what they mean for landowners and rural development

Biodiversity Net Gain (BNG) is now an established feature of the planning framework in England. Introduced under the Environment Act 2021 and embedded within the Town and Country Planning Act 1990 (TCPA), the regime requires most development granted planning permission to deliver a minimum 10% measurable improvement in biodiversity, secured for at least 30 years.  

Since February 2024, BNG has applied as a statutory condition to the majority of planning permissions granted under the TCPA. 

While the policy objective is clear, its operation in practice has raised a number of issues, particularly for agricultural landowners, rural estates and smaller development schemes. From the outset, government acknowledged that the BNG regime would need to evolve to ensure that it remained workable within the TCPA planning framework. 

On 15 April 2026, Defra published its response to consultations carried out during 2025, confirming a series of changes to how BNG will apply to development under the planning system. These changes are intended to introduce greater proportionality and flexibility, alongside a further consultation focused on brownfield land. These changes are of particular relevance to those involved in rural land management, estate development, and agricultural diversification, where decisions related to the grant and implementation of planning permission often need to balance commercial, environmental, and long‑term strategic considerations.  

A new exemption for very small development sites 

One of the most significant confirmed changes is the introduction of a new area‑based exemption for very small development sites. If sufficient Parliamentary time is available, it is currently expected that by 31 July 2026, developments on sites of 0.2 hectares or below (measured by the red-line boundary of the planning application) will no longer be required to demonstrate a 10% biodiversity net gain, whether on‑site or off‑site. The exemption does not apply if priority habitats are present within the development site. 

For rural landowners and family‑run estates, this is likely to reduce the regulatory burden associated with smaller schemes. Projects such as agricultural buildings, small‑scale residential development, or diversification uses have often struggled to accommodate the cost and complexity of BNG compliance, particularly where off‑site biodiversity units were required to be purchased. In our experience, local authorities have also taken widely varying approaches to section 106 negotiations on these sites, often seeking to duplicate statutory controls already in force under Schedule 7A of the TCPA, which has needlessly delayed the grant of planning consents.    

It is important to note, however, that the exemption does not remove all environmental constraints. Development proposals will continue to be assessed by local planning authorities against wider environmental policies including the National Planning Policy Framework (NPPF), and applications may still be refused where significant biodiversity harm cannot be avoided, mitigated, or compensated for. Careful site assessment remains essential. 

Removal of the self-build and custom-build exemption 

At the same time, Defra has confirmed that the existing exemption for self-build and custom-build dwellings will be removed from 31 July 2026. While many self‑build projects will fall within the new 0.2 hectare exemption, larger rural plots developed for self-build or custom-build housing may now be brought within the scope of BNG. 

This change reflects a broader move away from development‑type exemptions towards a more consistent, site‑based approach. For estates involved in the sale of serviced plots or the promotion of rural housing, this reinforces the importance of assessing BNG obligations at an early stage, particularly where plots exceed the new size threshold. 

Temporary development and flexible rural land use 

Defra has also confirmed an exemption for temporary development with a lifespan of five years or less. This may be particularly relevant in rural contexts, where land is frequently used on a temporary or transitional basis. The exemption recognises that land used for temporary projects must typically be restored to its original state, making long-term on-site biodiversity enhancements difficult to sustain; however, this would only apply to development which has its lifetime appropriately limited by planning condition. It is also important to note that agricultural permitted development rights are not generally caught by BNG requirements anyway.    

While the exemption provides welcome flexibility, it is not without risk. Where temporary permissions are extended, renewed, or converted into permanent development, BNG obligations may arise later. This has potential implications for land value, development agreements, and long‑term land management strategies, and should be borne in mind when planning phased or contingent uses. 

Greater flexibility in applying the biodiversity gain hierarchy 

Further changes are planned to the biodiversity gain hierarchy, which governs the order in which developers must consider on‑site habitat creation, off‑site delivery, and statutory biodiversity credits. For minor development that is not exempt, Defra has indicated that greater flexibility will be introduced, while leaving the hierarchy unchanged for larger schemes. 

For agricultural estates and rural landholdings, this may make it easier to align development proposals with existing land management objectives. In many rural settings, rigid on‑site delivery can be impractical or conflict with agricultural operations. A more flexible approach may allow biodiversity enhancement to be delivered in locations that make sense from both an environmental and commercial perspective. 

Brownfield land and the off‑site biodiversity market 

Alongside the confirmed changes, Defra has launched a consultation on introducing a targeted exemption for brownfield residential development up to 2.5 hectares, closing on 10 June 2026. While primarily aimed at urban and semi‑urban sites, this proposal may also affect rural settlements where previously developed land comes forward for housing. 

The consultation recognises that further exemptions could significantly reduce demand for off‑site biodiversity units. Analysis suggests that, combined with the 0.2 hectare exemption, demand for off‑site transactions could fall by up to 48%. This is a key issue for rural landowners who are considering habitat creation or biodiversity unit provision as part of a diversification or long‑term estate strategy. 

Where off‑site markets are affected, landowners may need to reassess the viability, timing, and structure of proposed biodiversity projects, particularly those intended to generate income over the long term. 

Infrastructure projects and future demand 

Finally, Defra has confirmed that mandatory BNG will apply to Nationally Significant Infrastructure Projects (NSIPs) from 2 November 2026. While most rural developments will not fall within this regime, it may be relevant where farmland or estate land is impacted by major infrastructure such as roads, energy projects, or utilities. 

Over time, NSIPs may generate further demand for off‑site biodiversity delivery, depending on how individual schemes approach avoidance, mitigation, and on‑site provision. For some landowners, this may present future opportunities, albeit with longer lead‑in times and greater complexity. 

What should landowners and rural businesses be considering now? 

The above changes underline that BNG is not a settled regime. For agricultural and rural landowners, early engagement remains critical. Understanding whether BNG applies, how exemptions operate, and how development proposals interact with longer‑term land use strategies can help manage risk, avoid delay, and preserve value. 

As secondary legislation and consultation outcomes emerge later in 2026, rural businesses, estates, and land promoters should keep development plans and land management strategies under review, ensuring they remain legally compliant, commercially viable, and aligned with evolving environmental policy. 

If you would like advice on Biodiversity Net Gain or rural development issues, contact Ben Garbett (Planning and Development) or Jamie Horner (Commercial).