BIODIVERSITY NET GAIN Unlocking value: Open mosaic habitats and the future of BNG

Yvette Black Tom Procter

Tom is a Senior Planner at JLL with over seven years of experience in public and private sector planning across the north of England, with a focus on Yorkshire and the North East. He is a Chartered Member of the Royal Town Planning Institute and has extensive experience in strategic land finding, managing planning applications and local plan representations.  Yvette is an Associate at JLL, covering the Midlands, North of England, and North Wales, assisting, preparing, and project managing planning applications across all sectors. She joined JLL in 2018, has over seven years’ experience in the private planning sector, and is a Chartered Member of the Royal Town Planning Institute.

Tom and Yvette presented to a meeting of North East Branch and kindly agreed to follow up with this article about an innovative approach to BNG through open mosaic habitats, and proposed reforms to the BNG rules, particularly for small sites – as well as opportunities for councils to play a positive role. 

Open mosaic habitats 

Biodiversity Net Gain (BNG) is rapidly becoming a cornerstone of sustainable development, driving a shift in how we approach land management and development. Introduced by the Environment Act 2021, BNG now mandates that new developments achieve a 10% increase in biodiversity, aiming to leave the natural environment in a better state, while supporting economic growth. While the concept is straightforward, the implementation can be complex, particularly when dealing with assets that have limited development potential. 

This article explores an innovative approach to BNG using "open mosaic habitats" – often overlooked areas within existing government assets – to create valuable habitat banks. We'll delve into the concept of open mosaic habitats, their ecological benefits, and how they can be strategically managed to deliver significant BNG outcomes. To illustrate the potential challenges of open mosaic habitats, we'll present a case study highlighting the significant costs involved, along with actionable tips and insights to guide your own BNG initiatives on local government estates. 

Open mosaic habitats are characterised by a mix of bare ground, grasslands, and scrub on previously developed or disturbed land, and are of a high biodiversity value. These often-overlooked areas, found on sites like abandoned industrial locations, quarries or former railways, offer unique opportunities for ecological enhancement. 

Open Mosaic Habitat (OMH) is classified as a 'high distinctiveness' habitat in the UK's BNG statutory metric. This creates practical issues because BNG's “trading rules” require that developers compensate for the loss of high distinctiveness habitats like OMH with habitat units of the same type, which is difficult and expensive. Creating new OMH on-site or purchasing it from third-party landowners is challenging due to undersupply in the market. Statutory biodiversity credits are available from the government, but they are deliberately expensive and subject to a “spatial risk multiplier,” potentially costing developers £960,000 (plus VAT) for just 10 OMH units. These costs could make brownfield sites less attractive for development, jeopardising the government's goal of building 1.5 million new homes. 

An expansive view of a brownfield site transitioning into an "open mosaic habitat,"

Not all brownfield sites will support open mosaic habitats, particularly where hardstanding areas dominate. It is clear that more sites are needed, until potential reforms are introduced creating clear opportunities for estates with landholdings to create OMH habitat banks in their local area for others to purchase credits and to offset their own developments. This creates ways to unlock and add significant value to sites with no or limited development potential. 

By carefully managing and restoring these habitats, we can transform underutilised land into thriving ecosystems, delivering significant BNG outcomes, while also generating potential revenue streams through the creation of OMH habitat banks. This approach not only contributes to conservation goals, but also unlocks hidden value in properties and land with limited conventional development potential. 

Proposed BNG reforms 

The government is seeking input on how to improve the implementation of BNG in England, especially for smaller developments and those on brownfield sites, with a consultation live until 24 July. 

While BNG has generally worked well for larger projects, smaller ones face hurdles such as increased costs and time, financial burdens related to habitat improvements, and a need for more expertise among developers and local planning authorities. The consultation explores potential changes to BNG regulations, the small sites metric (SSM), and related guidance to address these challenges. 

Several options are being considered to streamline the BNG process. These include reforming existing exemptions and potentially introducing new ones, such as revisions for self-build developments, and increasing the threshold for the 'de minimis' exemption. A more radical option is a full exemption for all minor developments. 

The consultation also addresses the SSM, exploring amendments to provide more flexibility in meeting BNG requirements onsite, simplifying habitat classifications, and offering additional guidance for habitat identification. 

To increase flexibility, the consultation considers allowing minor developments to more easily use off-site BNG options. This includes relaxing the biodiversity gain hierarchy and amending the spatial risk multiplier, which currently requires developers to purchase more off-site units if they are located further from the development site. 

Specific challenges related to brownfield developments with OMH are also addressed. The government is considering updates to metric definitions, guidance, and condition assessment to support ecologists in the identification of OMH and allowing the loss of OMH habitats to be compensated for with alternative mosaic habitats. 

While the government's effort to refine BNG implementation is commendable, the core challenge lies in balancing environmental ambitions with practical feasibility. Exemptions and relaxed rules, while potentially easing the burden on developers, could dilute the overall effectiveness of BNG. The key will be striking a balance that ensures genuine biodiversity gains without stifling smaller developments, or creating loopholes that undermine the initiative's original intent. The success of these revisions hinges on clear, enforceable standards and adequate support for local authorities to ensure consistent and rigorous application of the BNG principles. 

Case study 

JLL acted for an advanced manufacturing operator, based in Yorkshire, which was looking to expand its operation and develop new facilities. The client purchased approximately 7ha of previously developed land to provide the new facility. During due diligence, we identified that the site contained an area of OMH. Factoring this in, our client purchased the site and prepared a planning application, for which we secured consent earlier this year. 

A mid-range view of a developing "open mosaic habitat" area

A close-up view of a diverse patch of "open mosaic habitat,"

The key issues relating to the OMH were: 

• The site contained approximately 3 ha of OMH, which was graded by ecologists as being “moderate” quality 

• This equates to approximately 41 units of habitat in the statutory metric 

• The proposed redevelopment resulted in the loss of all OMH on site and it was not possible to re-provide any OMH on site 

• The client therefore needed to purchase off-site credits from a registered habitat bank 

• Identified a local habitat bank which offered sufficient OMH credits 

• Former quarry site with approximately 5.9 ha of OMH 

• The 30-year management plan for the habitat bank involved improving the quality of the existing OMH, allowing them to sell 72.73 OMH credits to developers 

• Credits are sold at £77,000 each, meaning that 5.9 ha of OMH represents a total potential income of approximately £5.6 m 

• The cost to our client of replacing 3ha of OMH was over £3m. 

Summary 

Amid the UK's drive for sustainable development, this article unveils the untapped potential of OMHs to reconcile ecological ambitions with economic realities. By transforming often-overlooked brownfield sites into valuable habitat banks, local authorities and developers can not only meet mandatory BNG targets, but also unlock revenue streams from land with limited conventional development potential. 

Examining proposed BNG reforms and a real-world case study, this analysis offers actionable insights into navigating the complexities and costs associated with OMH, paving the way for a future where biodiversity enhancement and financial value go hand in hand. 

Top tips  

JLL’s top tips for estate surveyors are: 

• Instruct experienced ecologists to check what habitat type your brownfield sites are and look at adding value to these through the creation of habitat banks where there is no development potential, and specifically for OMH 

• Instruct planning consultants to identify and undertake feasibility studies on these sites to confirm that there is likely to be limited development potential 

• Monitor changes to BNG principles and rules.