BNG changes from 6 August 2026: What do they mean for developers and habitat banks?
12 August 2026
After more than two years of mandatory Biodiversity Net Gain (BNG), most developers have become familiar with the requirement to deliver a minimum 10% biodiversity uplift.
However, new regulations that came into force on 6 August 2026 introduce some important changes that could alter how developers approach compliance and how habitat bank operators position themselves within the market.
The government's objective is clear, to reduce the burden on smaller developments while maintaining protections for important habitats. But while the changes may appear relatively modest, they could have meaningful implications for both developers and the off-site biodiversity unit market.
A new exemption for sites under 0.2 hectares
The headline change is the introduction of a new exemption for developments on sites of 0.2 hectares or less.
In most circumstances, these developments will no longer be required to meet the mandatory BNG requirement. For developers, this removes the need for biodiversity calculations, gain plans and, in some cases, the purchase of biodiversity units. The result should be lower costs and a simpler planning process for many small schemes.
However, there is an important exception. The exemption does not apply where a development would adversely affect a priority habitat. This means ecological due diligence remains essential, even on very small sites. A site may still require an ecological assessment before a developer can confidently rely on the exemption.
Temporary developments exempted
A second new exemption applies to temporary developments in which the land will be reinstated within five years or less.
This is likely to benefit certain temporary construction compounds, storage areas and other short-term land uses. As with the new site-size exemption, it does not apply where priority habitats would be adversely affected.
Although BNG may not be required in these circumstances, wider ecological legislation and planning policy requirements remain unchanged. Biodiversity considerations therefore remain relevant during project planning and delivery.
Greater flexibility for minor developments
Arguably, the most commercially significant change is the amendment to the biodiversity gain hierarchy for minor developments.
Previously, developers were expected to prioritise delivering biodiversity gains on-site before moving to off-site solutions. Under the new arrangements, qualifying minor developments can choose to secure registered off-site biodiversity units from the outset rather than first demonstrating why on-site delivery is not feasible.
For developers working on constrained sites, this introduces welcome flexibility. High-density residential schemes, urban infill developments and smaller commercial projects often struggle to accommodate meaningful biodiversity enhancements within the site boundary. Purchasing off-site units may now become the preferred route for many projects.
The requirement to avoid and minimise impacts on important habitats remains firmly in place, but developers now have greater freedom to decide how biodiversity gains are ultimately delivered.
The self-build exemption has been removed
Alongside the new exemptions, one existing exemption has been removed.
Self-build and custom-build developments are no longer automatically exempt from BNG requirements. Unless another exemption applies, such as the new 0.2-hectare threshold, these developments will now be treated in the same way as other planning applications.
For developers operating in the self-build sector, this may introduce additional ecological and BNG requirements.
What does this mean for habitat banks?
For habitat bank operators, the impact is likely to be mixed.
On one hand, the new 0.2-hectare exemption removes a proportion of future demand from the market. Some very small developments that would previously have required the purchase of biodiversity units will now fall outside the mandatory BNG regime altogether.
However, that's only part of the story.
The revised hierarchy for minor developments could increase demand for off-site units by making habitat banks a more straightforward compliance option. Developers of qualifying minor schemes can now move directly to off-site solutions without first pursuing on-site delivery. This has the potential to create earlier engagement, faster transactions and a larger pool of developers actively considering biodiversity unit purchases.
In effect, the regulations reduce demand for the smallest developments while potentially increasing access to the off-site market for a much broader range of minor schemes. Whether this results in a net gain or loss for habitat banks will depend on local market conditions, development patterns and the availability of registered units.
Final thoughts
While the headlines focus on exemptions, the bigger story may be the evolving relationship between developers and the off-site BNG market.
The smallest developments will benefit from reduced regulatory requirements, but many developers now have a more direct route to purchasing biodiversity units where that represents the most practical solution. At the same time, habitat banks may see demand patterns shift away from numerous small transactions towards a greater number of developers actively choosing off-site delivery as their preferred compliance route.
For both developers and habitat bank operators, these changes are a reminder that the BNG market is still maturing. Understanding how the new rules influence local demand, supply and pricing will be just as important as understanding the regulations themselves.
Contact Mark Topliff or our rural team if you would like to understand more about BNG and how we can help you.
