Maturing market for mandatory BNG units

Two years on from 10% biodiversity net gain (BNG) becoming mandatory in England, meaning that developers have to leave habitat in a better state than before development, the off-site units market has moved beyond early speculation into a more data-driven phase of price discovery and delivery.

Biodiversity Units UK's latest report, The BNG report: pricing and key insights February 2026, draws on data from 165 habitat banks and Natural England register allocations, providing the clearest picture yet of how the market is maturing.

Across England, prices for more abundant habitat types have begun to soften modestly over the past two quarters.

Other neutral grassland units are currently averaging around £24,000–£25,000 per unit, both in the north and south of the country. Hedgerows sit in a similar band, typically between £23,000 and £29,000 depending on distinctiveness and geography.

Certain woodland categories have also eased slightly where supply has increased. By contrast, the more highly distinctive units and watercourse units remain at a premium. Priority river units continue to trade at around £200,000 per unit, with other rivers and streams commonly exceeding £140,000–£160,000. These habitats remain scarce and complex to deliver, which is reflected in price stability.

The data suggests that the initial pricing volatility of 2024 has largely settled. Where we are seeing downward pressure, it is concentrated in habitat types where supply has scaled most quickly.

However, some categories show material divergence – for example, mixed deciduous woodland commands a significant premium in the south relative to the north, while certain lake and pond units remain markedly higher in northern markets.

This reflects local supply dynamics more than national trends. As in-area supply expands across local planning authorities (LPAs) and National Character Areas (NCAs), pricing is increasingly shaped by micro-market competition rather than broad regional imbalance.

Nearly 200 habitat banks are now on the Natural England register, and the majority of NCAs and LPAs have at least one in-area supplier. This is a significant milestone. Developers can now, in most cases, source locally and avoid the spatial risk multiplier, which increases the number of biodiversity units required when compensation habitat is further from the impact site, incentivising local delivery and preserving ecological integrity.

However, coverage does not yet equal depth. In many NCAs, one or two suppliers dominate. We anticipate that genuine competitive tension will require two to four active suppliers per NCA across a range of habitat types.

Importantly, we expect supply to continue expanding over the next 12–24 months, potentially outpacing short-term demand as development pipelines work through planning cycles.

Allocation data from the Natural England register shows more than 1,000 allocations completed to date, with nearly 5,000ha registered for BNG delivery.

Although allocations are a lagging indicator – typically occurring close to commencement – the upward trajectory indicates that BNG is embedding into routine planning practice. We are not seeing systemic evidence that BNG is materially slowing the planning process.

While discounting has improved short-term access to units, LPAs are increasingly reinforcing the BNG hierarchy and encouraging local mitigation. Over time, this may support firmer in-area pricing.

BNG for nationally significant infrastructure projects launches in May, introducing another wave of demand. Based on current project pipelines, we anticipate a more pronounced demand peak later this decade, potentially tightening supply in certain habitat types.

In short, the market is maturing. Prices are stabilising, supply is broadening, and behaviour is becoming more sophisticated. For developers and landowners alike, the key shift is this: BNG is no longer theoretical. It is operational, increasingly transparent and now, finally, measurable.