The government’s latest proposals to reform biodiversity net gain (BNG) requirements could support smaller housing developments that have struggled in recent years. Richard Greenwood, director of operations for new build at EN:Procure, explains how a more proportionate approach to BNG could unlock stalled brownfield schemes, improve SME viability and restart small site delivery.
In most of the discussions I had with contractors, housing associations and local authority partners at this year’s UKREiiF, viability was the consistent theme. England’s stock of brownfield land has capacity for around 1.4 million homes, including around 106,000 in Yorkshire and the Humber alone. Yet much of this potential remains unrealised because too many sites no longer stack up financially.
Now there is renewed optimism due to the biodiversity net gain (BNG) reforms currently being taken forward through government consultation and proposed policy changes. These include a 0.2-hectare exemption and targeted relief for certain brownfield residential sites – raising hopes that stalled schemes could return to the delivery pipeline.
From my experience working with local authorities, including Rotherham Metropolitan Borough Council, which has a target to deliver 2,000 homes on biodiverse, derelict land within a wider housing programme, the issue is not theoretical. The cost and complexity of BNG requirements, which since their introduction in 2024 have required developers to deliver a BNG of 10%, have already halted delivery on several sites where viability no longer stacks up.
Many of these schemes involve former housing land, old garage courts or derelict urban plots that often benefit from strong local support for redevelopment. However, once environmental requirements are factored in, projects can quickly tip into unviability, causing developments to stall even after planning consent has been secured.
Why smaller developers have felt the impact most
The current framework has been particularly challenging for SME developers, housing associations and local authorities delivering affordable housing. Historically, SMEs delivered 40% of England’s new homes, but this has fallen to around 10% to 12% under current pressures.
A significant number of sites affected by the current BNG requirements are urban brownfield plots, former allotments or underused parcels of land that have become overgrown over time. Because biodiversity assessments focus on existing habitats and species, some previously developed sites can still achieve high biodiversity scores despite having clear redevelopment potential.
In many cases, nature has simply reclaimed land that has been left untouched for years. While this can increase biodiversity value, it can also constrain small-scale affordable housing schemes, as neglected sites may become subject to environmental restrictions despite being suitable for meeting local housing needs. The proposed reforms appear to recognise this tension and move towards a more balanced approach.
One recent example involved a former allotment site where large areas consisted of hardstanding and old access routes. Despite its previous use and clear development potential, the biodiversity baseline still created significant viability challenges. The rules are the rules, but it demonstrates why many in the sector have called for a more proportionate system.
Bringing stalled schemes back online
The proposed reforms could begin to change that picture. We are already discussing schemes with partners where, if the final policy reflects the current consultation proposals, sites that were previously considered unviable could realistically return to the delivery pipeline.
Smaller developments operate with far tighter margins than large strategic sites, meaning additional requirements often have a disproportionately greater impact. That is why these reforms could be particularly important for SME builders and affordable housing providers.
At the same time, it is important not to lose sight of why BNG was introduced. The principle of protecting and enhancing biodiversity is widely supported across the industry. However, there is a clear distinction between applying these requirements to major strategic developments and applying them to small brownfield infill sites where biodiversity value may be more limited.
The importance of transitional arrangements
A key question now is how existing planning permissions will be treated under any new framework that is introduced. Many consented schemes have stalled because they no longer stack up under current BNG costs.
Uncertainty remains around whether Section 73 applications, which allow changes to be made to conditions on an existing planning permission, will be able to update approvals to reflect new rules, particularly where schemes have already started discharging conditions. The detail will be critical.
If Section 73 routes can be used to revisit permissions and remove barriers created by current requirements, there is real potential to unlock schemes that have already absorbed significant planning investment but are now on hold.
We have seen projects reach consent and then be dropped entirely because BNG costs made delivery impossible. Reassessing these could bring an immediate pipeline benefit.
What developers should do now
For developers, my advice is straightforward: keep schemes moving. Rather than waiting for reform, continue progressing applications and maintain momentum wherever possible. A glass-half-full approach is likely to place organisations in the strongest position to benefit when greater clarity emerges.
Where permission is already in place, it may also be sensible to consider the timing of certain condition discharges until there is greater clarity. With the sector under pressure from planning delays, funding constraints and weak market conditions, removing unnecessary barriers on smaller schemes could make a meaningful difference.
BNG reform alone is not the answer to England’s housing shortage. However, if it helps unlock stalled brownfield sites, reactivate dormant permissions and improve SME viability, it could become one of the most immediate ways to boost small site delivery and support the wider housing recovery.