Habitat banks and the thirty year obligation
A biodiversity unit is only as good as the agreement and the funding behind it. What to check in a habitat bank before allocating units to a scheme.
A habitat bank is land registered to deliver biodiversity units that developers can buy to meet the mandatory biodiversity net gain requirement. The defining feature of habitat bank biodiversity supply is the length of the commitment: significant habitat enhancements have to be maintained for at least 30 years under the Environment Act 2021 regime, secured by a legal agreement, with monitoring and reporting throughout.
That 30 year tail is what you are buying. It is also where the due diligence sits, because a unit is only as good as the agreement and the funding behind the land that produces it.
Biodiversity net gain assessment is a report type where a competent person is legally required. The Environment Act 2021 regime expects the statutory metric to be completed by a competent person and the biodiversity gain plan to be approved by the local planning authority, so any AI-assisted draft is a starting point for that professional rather than a substitute for them.
What a habitat bank provides
A habitat bank is a parcel of land where habitat is created or enhanced, assessed using the statutory biodiversity metric, registered on the national register of biodiversity gain sites, and legally committed to 30 years of management. The uplift in biodiversity value, measured in units, can then be allocated to developments that cannot achieve their gain on site.
Three features matter commercially. The units are habitat specific, so a development losing grassland cannot simply buy woodland units. The units are location sensitive, because the metric applies a spatial risk multiplier that reduces the value of gains delivered further from the development. And once units are allocated to a development they are gone, so availability is real rather than theoretical.
The mandatory requirement is a 10 per cent gain, applying to major development from 12 February 2024 and to small sites from 2 April 2024, subject to the exemptions in the regime.
Securing units for a development
The sequence is prescribed and it is worth following in order.
- Establish the baseline on site with a survey by a suitably qualified ecologist, feeding a Preliminary Ecological Appraisal and the metric calculation.
- Apply the mitigation hierarchy: avoid losses, then minimise, then deliver on-site gains, and only then look off site.
- Calculate the residual shortfall in units by habitat type, not as a single number.
- Identify a registered off-site provider holding units of the right type within an acceptable distance.
- Enter the legal agreement and have the units allocated to your development on the register.
- Submit the biodiversity gain plan for approval before development begins.
The gain plan is the gate. Under the regime a planning permission is subject to a condition requiring the plan to be approved before development starts, which makes it a pre-commencement step with the same programme risk as any other, and the practical mechanics are those of any approval of details or discharge of conditions application.
Statutory biodiversity credits sold by government exist as a last resort. They are deliberately priced to be unattractive, and relying on them is a budgeting decision rather than a strategy.
The thirty year maintenance requirement
Thirty years is measured from completion of the habitat creation or enhancement works, not from the date of the planning permission. During that period the habitat has to be managed in accordance with an approved management and monitoring plan, with condition targets to be achieved at defined points.
Think about what thirty years means operationally. The landowner may sell. The management contractor may fail. Grazing arrangements may lapse. A drought year may set back a grassland creation by several seasons. The agreement has to deal with each of those, and an agreement that only names the current owner is not fit for purpose.
| Risk over the term | What to look for in the agreement |
|---|---|
| Land sold | Obligation binding successors in title, registered against the land |
| Management failure | Step-in rights for the responsible body or authority |
| Funding exhausted | Ringfenced fund sized for the full term, with indexation |
| Condition targets missed | Remediation obligations with a defined process |
| Monitoring not done | Reporting obligations with named frequency and recipient |
| Provider insolvency | Security that survives insolvency, held outside the provider |
Legal mechanisms used to secure it
Two routes are used. A conservation covenant under the Environment Act 2021, entered into between the landowner and a designated responsible body, which binds the land and successors. Or a planning obligation under section 106 of the Town and Country Planning Act 1990 with the local planning authority.
Each has characteristics worth knowing. A conservation covenant with a responsible body is purpose built for this and does not depend on a particular planning application. A section 106 obligation is familiar and enforceable by the authority, but authorities differ in their appetite for taking on a 30 year monitoring role for land outside their area.
Where the habitat bank sits in a different local authority area from the development, confirm which authority or body holds the enforcement role and that it has agreed to do so. That is a question people assume has been answered and often has not.
Monitoring and remediation obligations
The management and monitoring plan should set out the habitat creation specification, the management operations by year, the condition targets and the monitoring schedule with the method and the reporting route.
Read the remediation provisions closely. What happens if the grassland fails to reach the target condition by year ten? Who decides, on what evidence, and who pays for the remedial works? A plan with targets but no consequence for missing them leaves the risk with whoever is relying on the units, which in practice may be you.
Ask for copies of the monitoring reports produced so far on an established bank. A bank that has been running for several years and cannot produce its reports is telling you something.
Pricing and availability of units
Unit prices vary with habitat type, distinctiveness, location relative to the development and the length of time the provider has been holding the land. There is no single market rate, and quoting one would be misleading.
What you can rely on is the structure of the cost. The price reflects land value forgone, the creation works, thirty years of management, monitoring, reporting, the legal agreement, the financial security and the provider's margin. A price that looks low against that list is worth questioning, because the thirty year management funding is the component most easily under-provided.
Availability is the practical constraint for high distinctiveness habitats, and the trading rules make that worse rather than better: losses of medium distinctiveness habitat must be replaced like for like or better, and high distinctiveness habitat needs bespoke compensation. So establish early which habitat types you are losing, because the hard ones take longest to source.
Due diligence before buying units
Run through this list before signing anything.
Confirm the site is on the national register of biodiversity gain sites and that the specific units you are buying have not already been allocated elsewhere. Obtain the metric calculation for the bank and have your own ecologist check the baseline and the uplift. Check the landowner's title and any competing obligations on the land, including agri-environment agreements, because land already managed for nature may not deliver additional value.
Then check the money and the law. See the financial security arrangement and satisfy yourself it survives the provider's insolvency and lasts the full term. Read the step-in rights. Confirm the enforcement body has agreed its role in writing. And confirm the spatial relationship between the bank and your site, because the multiplier applied in the metric changes how many units you need to buy.
A licensed or suitably qualified ecologist has to do the metric work and will usually lead this review. The Biodiversity Net Gain Assessment report page sets out what the assessment covers, and the professional directory is the route to the sign-off the regime requires.
Enter your postcode on PlanScope to see which reports a scheme with an off-site gain requirement is likely to need.
This is general guidance, not legal advice. Check the position with your local planning authority or a qualified professional before relying on it.
PlanScope provides AI-assisted draft reports for planning applications. Reports should be reviewed before submission. We do not guarantee planning approval.
Frequently asked questions
What is a habitat bank?
Land where habitat is created or enhanced, assessed with the statutory biodiversity metric, registered on the national register of biodiversity gain sites and legally committed to at least 30 years of management. The uplift in biodiversity value, measured in units, can be allocated to developments that cannot achieve their gain on site.
When does the thirty years start?
From completion of the habitat creation or enhancement works rather than from the date of the planning permission. Throughout the period the habitat must be managed in accordance with an approved management and monitoring plan, with condition targets to be achieved at defined points and reporting to the enforcement body.
How is a habitat bank secured legally?
Either by a conservation covenant under the Environment Act 2021 between the landowner and a designated responsible body, or by a planning obligation under section 106 of the Town and Country Planning Act 1990. Both must bind successors in title and be registered against the land.
Can I buy any units I like?
No. Units are habitat specific, so losses of medium distinctiveness habitat must be replaced like for like or better, and high distinctiveness habitat needs bespoke compensation. The metric also applies a spatial risk multiplier that reduces the value of gains delivered further from the development.
What should I check before buying units?
That the site is on the national register and the units are unallocated, that your own ecologist has checked the baseline and uplift, the landowner's title and any competing agri-environment obligations, the financial security and whether it survives insolvency, the step-in rights, and that the enforcement body has agreed its role in writing.
Are statutory biodiversity credits an alternative?
They exist as a last resort and are sold by government, priced deliberately to be unattractive compared with market units. Relying on them is a budgeting decision rather than a strategy, and the mitigation hierarchy still has to be applied before off-site provision is considered at all.
Sources and further reading
This article is general guidance about the planning system in England and, where stated, the rest of the UK. It is not legal or professional advice. Check your local planning authority’s validation requirements and take professional advice for your specific site.