The delivery of new homes across England is always a balancing act between hitting environmental targets and being commercially realistic.
In the Autumn Budget 2026, Chancellor John Healey confirmed a statutory concession designed to unblock stalled housing sites.
It works as an exemption from mandatory biodiversity net gain (BNG) for residential schemes on brownfield land up to 1.5 hectares.
Currently, the legal framework is yet to be fully confirmed, but it has come as a positive step forward for housebuilders.
Latest Budget Changes in Support of Developers
Across 28 October 2026 and 29 October 2026, the latest UK budget statement set out the government’s plans for economic stability.
The Chancellor was up against strict fiscal rules, as he aimed to manage public spending, departmental spending and government borrowing during a time of high debt.
To support the current budget and stabilise public finances, the Treasury set out targeted tax changes, strict anti-avoidance rules and a selection of policy measures to boost business investment without negatively impacting public services.
General Changes from New Budget
In addition to the planning reforms, the changes to the budget included fiscal and macroeconomic adjustments across various sectors:
Corporate Taxes, Reliefs and Administration
- Alteration to the main rates of corporation tax, revisions to the bank surcharge (bank corporation tax surcharge), and ongoing reviews into corporation tax simplification.
- Incentives for UK businesses and early investors, including new relief structures, updates to enterprise management incentives, and a new founders’ relief for lifetime gains.
- Updates to company reporting, including prescribed computations for amended company tax returns, new compliance officers to narrow the tax gap, an updated additional information form, and a phased introduction of mandatory payrolling.
Household Incomes, Energy and Living Costs
- Backing of technology like heat batteries to improve domestic efficiency, giving breathing space for the adoption of clean power.
- Enforcing the state pension triple lock, reforming medical benefits, updating council tax bands, giving a small payment uplift to carer’s allowance, and adjusting most other benefits alongside statutory increases to the national minimum wage and national living wage.
- Interventions to ease pressures on household incomes and alleviate the cost of living, especially with the effect of instability in the Middle East on energy prices.
- Reductions to the domestic energy price cap alongside reduced standing charges on domestic electricity to help lower winter electricity bills.
Housing, Devolution and Commercial Rates
- Initiatives to assist first-time buyers so more people can purchase their own home, helped by revisions to the first-time buyer ISA and lifetime ISA.
- Rate support linked to property rateable value thresholds to protect community hubs, including social clubs, neighbourhood vape shops and live music venues, alongside wider reform to business rates.
- Strategic coordination across other government departments to ensure that departmental funding actively supports regional regeneration and local infrastructure delivery.
Personal, Capital and Property Taxation
- A tax increase across selected assets, including uplifts to capital gains tax, revisions to business asset disposal relief, and updated rules governing both property income and savings income, as reported via a self-assessment.
- Measures to increase overall income tax revenues by countering fiscal drag across basic, higher and additional rate taxpayers, alongside adjustments to headline tax rates and thresholds for the upcoming tax year.
- Sector-specific duties and levies, such as an increase in percentage points on machine games duty across adult gaming centres, reformed UK VAT treatment for overseas suppliers and online marketplaces, and alterations to the capital treatment of qualifying business assets.
Although the fiscal decisions listed above dominated the headlines, the measures announced for residential development marked the most significant shift in statutory planning rules seen this year.
Brownfield Residential Development Exemption
The primary environmental reform in the budget confirmed that residential developments on brownfield land in England as large as 1.5 hectares will be exempt from the mandatory BNG requirements.
It directly addresses the mounting viability challenges, especially for SME housebuilders on tight urban plots where achieving a 10% uplift on-site is physically impossible and purchasing off-site statutory credits ruins scheme viability.
Earlier in the year, the government consulted on potential thresholds between 0.5 hectares and 2.5 hectares. By choosing to settle on 1.5 hectares, it appears as a compromise between boosting housing completions and safeguarding national nature recovery goals.
Despite the welcome certainty developers will gain from the BNG exemption, there are several operational details yet to be resolved, including:
- Criteria for Eligibility: The full eligibility criteria will only become clear once the draft regulations are published, including whether conversions, mixed-use and phased schemes qualify.
- Definition of Previously Developed Land: The statutory definition of brownfield land for the exemption will only be confirmed in the forthcoming consultation response and secondary legislation.
- Effective Date: A formal commencement date hasn’t yet been set, leaving developers to wait for the statutory instrument to pass through Parliament before submitting applications relying on the exemption.
Other Factors Affecting Planning and Development
The 1.5-hectare brownfield exemption sites within a far wider restructuring of the English planning system:
- Local Planning Authority Capacity: Despite transitional funding planned over the next 15 months leading into next year’s spending review, local authorities continue to struggle with planning officer shortages, calling for fully compliant environmental survey reports to prevent validation hold-ups.
- Macroeconomic Pressures and Viability: The latest Office for Budget Responsibility (OBR) forecasts and other economic forecasts point to persistent borrowing pressures and elevated interest rates as a way of keeping development margins tight.
- Prioritising Brownfield Sites: Under new prime minister Andy Burnham, the administration’s national planning agenda is leaning towards urban regeneration, meeting core objectives set out under the Labour manifesto pledge to accelerate housing delivery while protecting green belt land.
- Regulatory Milestones: Future policy steps will roll out across January 2026, January 2027, April 2027, July 2027 and April 2029, creating a revised regulatory baseline over the next three years, with a view to changing the path of the coming years thereafter.
- Wider Operational Levies: Supply chain overheads will reflect adjustments to the climate change levy, the zero rate VAT treatment on selected energy-saving materials, updates to the immigration skills charge, and local transport licensing rules for private hire vehicles.
It is also important to recognise that the biodiversity net gain exemption doesn’t remove wider statutory obligations towards wildlife.
Brownfield sites often support protected wildlife, including roosting bats, common reptiles, badgers and nesting birds, as well as any open mosaic habitats (OMHs).
Not only that, but the statutory protections under the Wildlife and Countryside Act 1981 and the Conservation of Habitats and Species Regulations 2017 remain unchanged.
Guidance on Dealing with Biodiversity Net Gain (BNG)
After already feeling the pinch from recent corporate tax rises and changes to profit margins, developers really wouldn’t be happy to see statutory delays in the planning system right now.
The confirmed 1.5-hectare brownfield exemption, however, offers an opportunity at welcome relief. That said, it’s crucial to remember that it isn’t law yet and that secondary legislation needs to pass through Parliament to confirm the start date and the legal definition of previously developed land.
If you decide to rely on an exemption before it takes full effect, it’s only likely to bring unwanted risk into your plans and cause your planning application to get knocked back. Due to this, it would be strongly advisable to reach out to Arbtech for assistance with navigating biodiversity net gain (BNG).
Our ecological consultants can check what applies to your development right now and confirm if mandatory BNG applies to your planning project. From there, we can go on to carry out the surveys you need and put together plans and reports to help progress your plans and get planning permission.
By reaching out to us ahead of time, you can prevent avoidable issues in later years and guarantee that you’re operating in a way that is compliant and adheres to the rules and regulations of your local planning authority and all related legislation.
Get Advice from Our Ecological Consultancy
If you’re working with a brownfield plot of land, planning a residential scheme or dealing with something entirely different, message our team, and we will step in to assist you.
Feel free to email us, call us, complete the quote form at the top of this page or visit our contact page for other options.
Whatever you need, we can work out how much it will cost and give you a free quote for you to look over before you make any decisions.
