Chancellor John Healey has announced that residential brownfield developments on sites up to 1.5 hectares in England will be exempt from biodiversity net gain (BNG), as part of Labour’s 2026 Autumn Budget.
The Budget document confirms the BNG exemption, intended to reduce the cost of building homes on previously developed land. However, the government has not yet set out when it will begin. Its consultation response and impact assessment will follow.
I would be careful about taking this announcement as permission to remove ecology costs from a project today. The BNG exemption would be a significant change for affected sites, but an announcement does not remove a current requirement to have a biodiversity gain plan approved before work starts.
What the Budget confirms about the BNG exemption
BNG normally requires development within its scope to leave wildlife habitats with at least 10% more biodiversity value than before, measured using the government’s statutory metric. Developers can deliver that improvement on their site or through approved off-site arrangements.
The new BNG exemption is aimed at housing on brownfield sites up to 1.5 hectares, equivalent to 15,000 square metres. It is not an announcement that every development below that size, or every brownfield development, will be exempt.
Paragraph 6.119 of the Budget says: “The full government response to the consultation and impact assessment will be published in due course.” That response will also set out the implementation timetable.
The Department for Environment, Food and Rural Affairs consulted between 15th April and 10th June 2026 on a possible brownfield BNG exemption, testing thresholds from 0.5 to 2.5 hectares. Today’s Budget selects 1.5 hectares, moving the story beyond the earlier consultation.
The consultation also proposed a test requiring at least 75% of the application site to be previously developed land, alongside safeguards for priority habitats, which are identified nationally as conservation priorities. The Budget does not confirm those detailed tests. We need the final response and legislation before assuming how mixed-use sites or existing applications will be treated.
Lower building costs, but concerns for nature
Healey’s announcement comes amid pressure from smaller housebuilders over development costs. In a statement published on 27th October, before the Budget, Home Builders Federation chief executive Neil Jefferson said: “To restore confidence, smaller developers need targeted action that enables them to continue operating in an increasingly difficult market.”
Conservation organisations have warned about the cumulative effect of exemptions. Writing on 7th May, Matt Browne of The Wildlife Trusts and Philip Box of Wildlife and Countryside Link said: “BNG cannot function as a ‘win-win’ policy for nature and development if it is riddled with loopholes.” Their warning included proposed brownfield exemptions.
There is a wider commercial question too. The government’s nature finance paper published on 26th October promotes private investment in habitat recovery. Reducing the number of housing schemes that need biodiversity units could affect that market. The promised impact assessment should help us understand the scale.
Existing duties still matter
This announcement is separate from the BNG exemption already available for qualifying sites no larger than 0.2 hectares. Under the regulations introduced this summer, that exemption applies to applications made from 6th August 2026, subject to conditions including no impact on on-site priority habitat.
The Budget also repeats that BNG is being extended to nationally significant infrastructure projects. Existing government guidance gives 2nd November 2026 as the start date. That was already announced before this Budget.
For anyone considering a brownfield purchase or planning application, I would check the site boundary, its development history and the ecology evidence now. Our guide to biodiversity net gain explains the current framework. Keep the current BNG requirement in your programme until the new BNG exemption and its transitional rules actually apply. We will return to the detailed eligibility rules when the government publishes them.
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