Brand New BNG Market
England’s recent Biodiversity Net Gain (BNG) policy has reshaped the national planning process for developers. Since February 2024 for major sites and April 2024 for smaller sites, developments must not only compensate for biodiversity loss in construction but also enhance this to a net gain of 10%.
Developers must meet this target on-site where possible to promote localised nature recovery. Various constraints, however, can make this unfeasible, so many developers must then look off-site to fulfil the requirement.
What this means is that they purchase BNG units: plots of land containing (or growing) habitats that match the ones they destroyed. Averaging at £28,594 per BNG unit, this brings another challenge: developers having to purchase expensive BNG units from a nascent, untested market, with no established prices, trends, or benchmarks.
At Gaia, our BNG Marketplace platform is supporting developers through this. At its core, it’s a centralised platform that enables landowners to sell BNG units and developers to purchase them. Since BNG launch, it’s grown to be the largest provider of off-site BNG units, now holding the majority of available ones out there.
The platform gets over 1000 searches a week for BNG units, with developers filtering by location, unit type, habitat types, price and more, and Gaia ensures they share these BNG insights to inform and educate developers of the new market.
Starting Figures
Initially, most sellers listed units between £28,000 and £30,000, reflecting the uncertainty in a new market. Six months later, we are starting to see some price diversions, with units as low as £12,000 and as high as £98,000, however the average unit price is still relatively settled at £28,594.
This breaks down into Area at £30,036, Hedgerow at £32,090 and Watercourse at £44,919. This makes sense, as 97% of units on the platform are Area, 2.5% are Hedgerow and only 0.5% are Watercourse.
There is a clear disparity between supply and demand. 15% of unit searches are for Hedgerow, with only 2.5% available, and 15% are for Watercourse, with only 0.5% available. This is why Gaia’s platform is a crucial resource—if no units are available, you can submit a unit request which we correspond with our 200+ sellers to make a match, or you can use our bespoke unit-sourcing consultancy for a more direct, brokerage route.
The market has not been predictable and enquiries from developers have spanned a broad spectrum. A buyer could request 0.015 units from a seller (totalling £428, based on the unit average), then a different buyer, mere hours later, could request 108 units (totalling over £3 million).
Supply and Demand
Understandably, there has been most demand for units in the South East at 41%, with dense urbanisation and concentrated development. This is followed by the South West at 19%, East at 17%, East Midlands at 12% and then the North West at 12%.
This supply is being met—there are over 6,000 units available in the South East, over 5,000 in the East, compared to under 800 in the North East and just over 1,000 in the North West. These average at £28,995 in South East and London and £32,970 in the East, compared to £26,383 in the North West and £24,737 in the North East.
If required units are in short-supply or largely overpriced, developers can search in cheaper regions, purchasing nationally at a 2:1 ratio, and sorting prices low to high to get the best value. Our BNG Marketplace not only helps developers find the best prices through policy-smart features but also offers strategic insights to navigate a rapidly evolving market.
Written with Gaia
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