Ray of Hope for SME Developers over BNG
New working paper suggests small sites will be exempt from the requirement for 10% biodiversity net gain…
The subject of biodiversity net gain (BNG) has been a bone of contention for smaller developers since the start, but a ray of hope has been offered by the government.
As we have said previously, the requirement to show BNG is almost impossible when working on a small site, without having to buy off-site credits from providers, in order to achieve the 10% BNG demanded. BNG was introduced by the 2021 Environment Act and came into force in 2024. And it could be argued that the value of these off-site credits, away from the original developments, is diminished anyway. For larger developments, it is far easier to find an open space on the proposed site.
However, a working paper – Planning Reform Working Paper: Reforming Site Thresholds – published on 28 May 2025, suggests that small residential developments of between one and nine homes, should be exempt from these demands.
The simplification of BNG requirements for SME developers is part of the government’s bid to build 1.5 million new homes during this parliament.
Deputy prime minister and housing secretary Angela Rayner said: “We’re taking urgent action to make the system simpler, fairer and more cost-effective, so smaller housebuilders can play a crucial role in our journey to get Britain building.”
The same paper also suggests a new size threshold – a medium development threshold – which would encompass developments of between 10 and 49 homes on a site smaller than a hectare, or sites of between 0.5 and one hectares if the number of dwellings is not known.
These sites would also have restructured BNG requirements, and the government is also exploring whether they would be exempt from the proposed Building Safety Levy.
On the same day that the working paper was published, the government committed £10 million to help councils fund more specialists to speed up environmental assessments. It also announced consultation on how BNG for Nationally Significant Infrastructure Projects (NSIP) will be applied to provide consistent regulations for developers. Changes are due to come into effect from May 2026.
Reaction to the news was varied. Robbie Calvert, head of policy and public affairs at the RTPI – of which Apex Planning Consultants is a member – told The Planner: “The decision to exempt small sites from biodiversity net gain requirements is a sensible approach, given the severe lack of resourcing and ecological skills available to local authorities. However, we expect the government to develop long-term solutions to ensure nature is protected and enhanced by the planning system without starving the country of the economic growth it needs.”
However, Joan Edwards OBE, director of policy and public affairs at The Wildlife Trusts, claimed: “This is bad news for nature and communities – it is yet another appalling example of the government breaking its promise to put nature at the heart of housebuilding. Building developments can have a huge impact on wildlife, and it’s only fair that they [developers] should make up for this by increasing natural habitats on-site or nearby. The UK Government’s proposal to exempt small developments from delivering biodiversity net gain and contributing towards nature recovery fails to recognise the significant cumulative impacts such development can have.’’
The consultation is open until 23 July.
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