Plans to weaken environmental regulations for small housebuilders would allow developers in England to build on an area the size of the Yorkshire Dales in the next 10 years without replacing the nature they destroy, according to analysis.
Labour wants to remove the requirement for small housebuilders – those whose sites are under a hectare (2.5 acres) – to replace the nature they destroy under existing rules known as biodiversity net gain.
Ministers are consulting on plans to tear up the rules for small developers in an attempt to increase housing. Analysis of Labour’s proposal by environmental economists from the consultancy Eftec, suggests 97% of planning approvals – 76,800 out of 79,300 every year – would be exempt from the requirement to replace destroyed nature.
This would mean an area of more than 215,000 hectares, the size of the Yorkshire Dales, could be built on over the next decade with no requirement to compensate for any nature destroyed.
The biodiversity net gain rules were brought in to help tackle major nature loss. The UK is one of the most nature-depleted countries in the world, and the government has signed a pledge to protect 30% of land and sea for nature by 2030.
Biodiversity net gain, which requires developers to ensure a 10% increase in biodiversity, came into effect for major developments in February 2024 and for small sites two months later. The report says plans to scrap the rules for small developers – who dominate planning in England – would render the scheme utterly ineffective.
“Biodiversity net gain is a hugely important principle: industries that harm nature should contribute to its recovery,” said Richard Benwell, of Wildlife and Countryside Link, which commissioned the research with the Lifescape Project. “The proposal to drastically widen the number of exempt small sites from the system would be a return to the bad old days of damaging development, and torpedo confidence in private investment in nature recovery.”
Biodiversity net gain was supposed to apply to most planning applications but the research found 86% (69,500 out of 80,400) of planning applications approved between March 2024 and February 2025 claimed exemptions, in what the researchers believe could be widespread abuses by developers.
Biodiversity net gain is not required for sites smaller than 25 sq metres, or those that do not affect protected habitats. But developers are able to “self declare” to claim these exemptions.
Economists found a rise in claims for these “de minimis” exemptions, after the rules came into force last year. “The scale of misuse across different sizes of planning applications suggests the de minimis exemption may be being intentionally misinterpreted,” the report said.
Joan Edwards, the director of policy and public affairs at the Wildlife Trusts, said the government wanted private investment to help it meet its binding nature recovery targets by 2030, but changing the system could destroy the biodiversity market.
“Scrapping biodiversity net gain for small sites would be a spectacular own goal,” she said. “Nothing undermines private-sector confidence more than a government that chops and changes the rules on a whim.”
The economists suggest Labour should tweak its changes to improve efficiency. It suggests excluding only sites of up to 0.1 hectares that align with the government’s proposed new definition of “very small sites”. This would also remove the loophole that allows some very large sites to sidestep BNG entirely by claiming de minimis exemption.
Thousands of individuals and organisations have responded to the government consultation, which ends on 24 July.
Robert Oates, the chief executive and founder of the ecological consultancy Arbtech, said the government’s proposal “threatens both its goals: supporting nature recovery and accelerating housebuilding”.
“Small site biodiversity net gain has only been in place for 13 months, yet developers and businesses have spent years preparing for it. U-turns like this create damaging instability. Developers need certainty, not another policy rewrite.”
A government spokesperson said: “This government is fully committed to biodiversity net gain and this consultation explores easier, quicker and cheaper routes to deliver gains for both developers and nature. We are also consulting on how biodiversity net gain should be applied to nationally significant infrastructure projects to provide a clear framework that ensures major new developments deliver for nature and contribute to our legally binding targets.”
