With biodiversity net gain (BNG) legislation now in force, developers and landowners are naturally preoccupied with how this impacts the development potential of their sites.

While navigating the new legislation can present another planning hurdle, it also has the potential to provide a revenue stream for land deemed unsuitable for development.

Creating biodiversity units on your land

If developers are unable to achieve the legal requirement of 10% BNG on site, they can buy ‘credits’ in new or enhanced habitats off site to satisfy their BNG obligations.

With supply of off-site biodiversity ‘units’ currently extremely limited, there is a significant opportunity for land with no development potential to generate additional income through the creation of habitats, that could add to the supply of BNG units.

Current research suggests that prices are between £20,000 per unit for areas of’ low distinctiveness’ and £100,000 per unit for areas of ‘high distinctiveness’ (this will likely vary across different parts of the country). While the credit system is complex, with multiple exceptions and variants, it is possible for 1ha of land to yield multiple biodiversity units, depending on the habitat created or enhanced. These prices will likely fluctuate over time as more sites are allocated for BNG.

Planning permission

For land with an agricultural, forestry or horticultural use designation, planning permission would not ordinarily be required to create habitats. There are exceptions, and we would recommend engaging with a planning expert if you are considering making your land available for BNG credits.

While every local authority (or other responsible body) will have its own processes, our experience is that some elements are consistently required:

Landowners will need to enter into a legal agreement with the local planning authority (LPA) to agree the habitat and ensure its management for a minimum of 30 years.

An ecology report will be required to assess the baseline of the habitat levels, both before and after any enhancements have taken place. A metric designed by DEFRA will need to be completed as part of the ecological work to demonstrate the potential of the site.

Local Plan Process

When presenting a site as a potential habitat for BNG units, the earlier you can engage with the LPA, the better.

By presenting your site during local or neighbourhood plan consultations, or in respect of a Local Nature Recovery Strategy (which is prepared separately to the local plan process) you can ensure the council has time to carefully consider it at an early stage. This benefits the council too, allowing them to ensure a sufficient supply of sites in their areas.

Early engagement also means landowners could influence the wording of any BNG specific policies, including the information which might be required to secure biodiversity units. It also means your proposals will be visible to any developers (who may need to buy BNG credits) when local plans or nature recovery strategies are published.

There are some associated costs, like those for site assessment and improvement, and professional planning and legal services. However, the revenue from BNG units could be significant.

Rather than being a drain on resources, constrained or marginal land can work more effectively; Creating BNG units is especially helpful for those with land in the green belt or areas at risk of flooding. If options for development have been ruled out due to land or planning constraints, this could be a great option for a consistent and guaranteed revenue.

SF Planning have in-house policy experts who are advising landowners and developers on the potential for their land and representing their interests to the LPA, get in touch for more information about how we can help.

Liz Shield MRTPI
SF Planning

CHECK WITH NICOLA CONTACT DETAILS ON LAST PARAGRAPH

At Perry Bishop we work very closely with local, regional, and national developers and pride ourselves with our New Homes knowledge across each team.

We are proud to be one of the only Estate Agents where all customer facing staff have successfully completed and passed the ‘Understanding the Consumer Code for Home Builders’ course.

The Consumer Code for Home Builders helps agents in the industry improve quality and customer service which in turn makes the new-build home buying process fairer and more transparent for consumers.

The Code covers every stage of the home-buying process – pre-contract, exchange of contract for two years after legal completion.

The Code reinforces best practice among home builders and agents to encourage a consistently high level of information and customer service. It builds on successful efforts already made by the industry to improve consumer satisfaction in recent years.

We are delighted to announce that following the owner’s decision to retire from the business, Perry Bishop has taken over the successful and well-regarded “Cirencester Sales and Lettings” business.

We understand the challenges of organising outdoor events and the need for suitable equipment to ensure success. That’s why we’re thrilled to offer our complimentary gazebo borrowing service.

Whether you are organising a school fete, charity fundraiser, a family gathering or any other outdoor event, our Gazebo (measuring 4 meters x 3.5 meters) can create an additional welcoming space.

Last year, a variety of charities, schools, and community organisations benefited from using our gazebo, helping to make their events more comfortable and enjoyable.

If you are interested in booking the gazebo, please email gazebo@perrybishop.co.uk and we will be more than happy to coordinate delivery to your event, subject to availability.

Kind Regards

Perry Bishop

Are you considering selling your property but unsure of the best method? While traditional methods like private treaty sales have their advantages, selling via online bidding can offer a range of benefits that might be perfect for your situation. Here are some reasons why selling your property via online bidding could be a smart choice:

You may think this is a strange topic, but lots of homeowners remain unaware of the laws regarding garden fences until they find themselves embroiled in a frustrating and costly boundary dispute. So, here you’ll find some expert advice to help you stay well-informed about your property rights and obligations as a homeowner.

You might be wondering, ‘why buy a rental property in the Cotswolds and the Vale of the White Horse? After all, the global landscape is treading on eggshells at the moment, with a new event seemingly occurring every week.

Knowing when to sell your home is tricky. Every homeowner wants to do what is best for their family and get the most profit from their property. So when is the best time to sell your home?

When it comes to selling your home in the Cotswolds and the Vale of the White Horse, there’s a lot of overwhelming information and old wives tales out there, and it can sometimes be difficult separating the fact from the fiction.

A new Leasehold and Freehold Reform Bill is working its way through the UK Parliament.

The proposed legislation aims to address criticisms that the current system is unfair to homeowners by banning the sale of new leasehold houses and creating a standard 990-year lease length for most apartment owners.

It would also streamline the extension process to be simpler and cheaper while restricting ground rents on new leases to zero cost.

The Bill has cross-party political backing, with some stating it represents the most significant leasehold reforms in decades that could save homeowners money if implemented.

The practical impact, however, depends on the Bill successfully passing through the full legislative process. As the scope could change, and no timeline is defined for the measures to take effect if approved into law.

With that in mind, here’s your guide to everything that’s currently going on with the Leasehold and Freehold Reform Bill.

What is The Leasehold and Freehold Reform Bill?
The Leasehold and Freehold Reform Bill targets key areas for housing changes. And aims to alleviate financial and legal burdens for homeowners stuck with outdated housing contracts.

The end of leasehold houses
It prohibits the selling of new leasehold houses. Ending a practice where house buyers still did not own their homes after paying off mortgages. Instead, freeholds will now be offered for all new houses.

Changes to existing leasehold houses
For existing leasehold houses, the reforms make it easier for owners to voluntarily extend leases to 990 years. With zero ground rents, essentially turning them into freehold equivalents.

New rules for flats
On flats, the Bill gives leaseholders the power to extend leases more easily and challenge unfair contract terms or costs imposed by freeholders. It also facilitates buying a share of freehold in apartment blocks without needing majority consensus.

If passed into law, these steps will curb exploitative charges in an area where costs have frequently spiralled out of control. While it won’t eliminate all leasehold problems overnight, it lays the legislative foundations to restore more balance.

The Leasehold and Freehold Reform Bill at a glance
There’s a fair bit packed into the Leasehold and Reform Bill. So, let’s break down the most important points and what they entail.

The bill plans to:

• Make it cheaper and easier to extend your lease or buy the freehold for existing leaseholders in houses and flats.
• Increase the standard lease extension term from 90 years to 990 years for houses and flats, with ground rent reduced to £0.
• Remove the two-year ownership requirement before leaseholders can benefit from reforms.
• Ban new leasehold houses in England and Wales – but not leaseholds on new flats.Make buying or selling a leasehold property quicker and easier by capping time and fees for information provision.
• Require transparency over leaseholders’ service charges.
• Replace building insurance commissions with transparent admin fees.Extend access to redress schemes for leaseholders to challenge poor practice.
• Scrap presumption for leaseholders to pay freeholders’ legal costs when challenging poor practice.Grant freehold homeowners on private and mixed tenure estates the same redress rights as leaseholders.
• Ensure freeholders and developers can’t escape funding remediation work.
• Allow leaseholders in buildings with up to 50% non-residential floorspace to buy their freehold or take over its management.

Is this leasehold reform new?
Concern about the leasehold system isn’t new news. There were commitments and pledges to overhaul it in the 1980s, but meaningful action failed to materialise.

A lack of action led to an increasing number of homeowners feeling trapped. Paying high fees for homes they would never technically call their own. But after decades of empty promises, the leasehold scandal came to a head in 2017 when the problems made front-page headlines.

Leasehold reform is a component of housing policy and is something our friends at Propertymark have campaigned on for several years now. Their research paper of 2018 ‘Leasehold: A Life Sentence’ highlighted a lot of leasehold issues.

Fast-forward to 2024, and mounting public pressure looks like it’s about to effect change. And we’re seeing a concerted effort to rectify problems with the Leasehold and Freehold Reform Bill.

When will the Leasehold and Freehold Reform Bill come into effect?
The Leasehold and Freehold Reform Bill was introduced in the House of Commons on November 27th, 2023, as part of the legislative agenda outlined in the King’s Speech.

While the Bill sets out proposals to overhaul leasehold rules, the scope and timing of these reforms face uncertainty as the legislation navigates Parliament. There is currently no defined timeline for when the bill might receive Royal Assent to become law.

Additionally, details are pending on when each specific reform would take effect if approved. As well as the possibility of initial measures being amended during parliamentary procedure.

The practical impact relies on sustained momentum to successfully translate announcements into legally binding changes. Which could meet roadblocks before enhancements materialise for existing homeowners.

Should I extend my lease now or wait?
For existing leaseholders considering extending their lease, the best move will likely be to proceed ahead of the reforms being finalised. Despite the legislative momentum, successfully turning the bill into law will not be quick.

Having extra years on your lease guarantees more protection if other aspects like ground rent reduction don’t come to fruition.

Selling your home?
If you’re looking to sell a property, freehold or leasehold, contact our experienced team today by clicking here

Content courtesy of Phil Spencer – Last Updated: January 24th, 2024