Kent landowner’s BNG project demonstrates market challenges

John Newbury completed the purchase of the land at Chalksole Farm near Lydden in 2024 after considering several alternative blocks.

On the land he is creating biodiversity net gain (BNG) units for sale to developers as compensation for habitat loss on their sites.

Chalksole has been added to Defra’s BNG register, so buyers from London, Sussex, Hampshire and Kent can access the 260 units being created.

See also: Biodiversity net gain – how things stand one year on

The units have a current value of about £20,000 each and the plan is to sell roughly 20 units/year.

None have sold yet but it is early days, says John, who estimates the cost of establishing the habitat will run to about £250,000. On top of this are maintenance costs for the 30-year project.

John is not a farmer but his enthusiasm for his BNG journey means he is happy to share his experiences and insights.

He operates a grounds care business, J N Gardening, employing 25 people in London, Kent, Berkshire, Hampshire, Hertfordshire and Sussex.

The land was bought with cash from the existing business and a separate company, Biodiversity and Habitat Solutions, has been created for the BNG site, which John likens to a private nature reserve.

The former arable land at Chalksole Farm before conversion work started © Biodiversity and Habitat Solutions

He says good budgeting and reviewing is needed for a BNG enterprise, taking account of the likely erosion of the value of returns by inflation, as well as its impact on costs through the 30-year agreement.

“Assume you sell a unit today at £20,000, that’s still £20,000 in 30 years’ time, so you really have to look at the deflation erosion effect – you’ve still got the same land costs, insurances and contractor costs but of course you’ve had your payment up front,” says John.

Much of Chalksole’s boundary is wooded, and home to dormice, with two sites of special scientific interest (SSSI), so part of John’s tree-planting plan will link two SSSI woodlands.

Areas of scrub are designed to encourage turtle doves back to the site.

Chalksole Farm BNG site, Lydden, Kent

The Chalksole team (l-r) Liam Mattingley (Biodiverse Consulting), Vicki Mordue, John Newbury, Dan Tuson, Stephanie Bramley (Dover District Council) © MAG/Suzie Horne

The site is 33ha of former arable and dairy land, on which the following habitats will be created:

• Lowland calcareous grassland
• Broadleaved woodland
• Neutral grassland
• Mixed scrub
• Lowland meadow
• Pond
• Individual trees
• Hedges with trees

Risks

The main risks include the new and, as yet, quite slow market for BNG units, alongside potential price pressure and the weather.

John reckons there are already enough BNG units in the pipeline to supply the planned developments in Kent for the next 15 years.

Good establishment of the hedges, trees, grassland and scrub is crucial but very weather dependent, and the newly planted hedges have already been watered twice.

The plans at Chalksole include creating calcareous grassland and lowland meadow, both high value habitats on the Defra BNG metric.

Establishing calcareous grassland will be helped by the import of 1,500t of chalk which has been spread and rolled.

John Newbury on chalk pad in preparation for sowing to produce calcareous grassland © Biodiversity and Habitat Solutions

John’s experience in grounds care means he knows what will work in terms of planting in many circumstances, and, more importantly, how to keep plantings alive.

Once established, the grassland will be grazed by cattle and sheep.

With the variable climate and the challenge of establishing new habitats, John recommends other landowners considering BNG should not overpromise or aim too high in terms of the quality of habitat they put in their plans.

“If you go for low quality and achieve medium- or high-quality habitat, then you will create more units, but you must deliver at least what you promise in the plan,” he says.

With this in mind he has bought top-quality native wildflower seed for £65,000.

“You’ve got to make sure it’s going to last, especially for lowland meadow. We have 10 species/sq m in our mix.”

Hedges will be 2m wide, with each face being cut once every three years in rotation.  

© Biodiversity and Habitat Solutions

He stresses the requirements of the habitat management and monitoring plan (HMMP) can be stringent.

“If you lose a tree, you have to replace them like for like, so if I lose a five-year-old tree, that’s what I have to replace it with.”

John has planted tree whips that are stronger than he needed to put in, simply to give them a better chance of establishing well.

He says Dover Council has been very pragmatic in its approach to the Section 106 planning agreement, which allows for the possibility of habitat being lost through force majeure (an “act of God”), such as fire.  

“There is not currently a market that will insure against BNG disaster,” says John.

“I’m sure that will come together, but I have got as comprehensive an insurance as I can for any damage to hedges and grassland – there is a market but it is very loose at the moment.”

Dover Council has been very proactive and has a very clear system, says Vicki Mordue, managing director of Biodiverse Consulting, which advises John.

“However, I have seen Section 106 agreements elsewhere that oblige the landowner to buy in units in the case of a failure in establishing the habitat.”

Biodiverse Consulting also runs a brokerage which markets for 26 habitat banks spread across England.

Work has started to convert the former arable and dairy land to a range of conservation habitats including lowland calcareous grassland, broadleaved woodland, and lowland meadow © MAG/Suzie Horne

Teamwork

John stresses that as well as advice from Biodiverse Consulting, there has been strong collaboration with Dover District Council, whose support has been integral to successful delivery of the site.

There has also been valuable input from Dan Tuson, farm conservation adviser at Natural England, in considering the mosaic of habitats to be created in relation to what will work on the Defra metric on which they are calculated.

While BNG ties the land in for a 30-year commitment, John is running on 30 years plus two, as he will receive his compliance certificate from the council only after a check at two years, which is how long it will take for some of the habitats to be established.  

Given the cost of establishing BNG, he considers that 20-25ha is a minimum site size.

Establishment costs at Chalksole include:

• £40,000 Dover Council monitoring fees over 30 years. Vicki Mordue points out that some other councils charge as much as £80,000-£90,000 and that finding out about these charges can be quite difficult
• £50,000 Biodiverse Consulting fees for monitoring costs over the 30 years, to confirm that the site is on track to meet the conditions set and to make recommendations for any adjustment needed to the habitat management and monitoring plan
• £25,000-£30,000 for habitat management and monitoring plan, soil testing, legal fees on Section 106 agreement
• A BNG register one-off registration fee of £639
• A BNG allocation fee of £639, payable each time units or part units are allocated to a developer
• £65,000 on highest quality native seed wildflower seed
• £12-14 each for 260 individual trees, including basic tree guards
• £20/m for hedges (nine species), including Tubex guards
• £7,000-£9,000 for pond creation
• Approximate contracting fees of £45,000 for spraying glyphosate, cultivations and drilling
• 2-10% broker fees on unit sales.

In a hot summer it will cost easily £30,000/year for maintenance, including to water the whips, says John.

In 20 years, this could easily be £80,000-£100,000/year, he suggests.  

Vicki says: “One of the real advantages John had over some other clients is that he has a workforce available who are familiar with habitat creation work, so as soon as the purchase went through, he was ready to go.

“That’s an economic advantage. It also means he’s been able to start straight away.

“The earlier you can create those habitats, the more units you generate. You need a genuine interest in BNG and an understanding of the land.”

Habitat bank considerations

Vicki cautions there is lots to consider when setting up a habitat bank, not just what will work ecologically, but also cost and what units will people want to buy.

It’s a very different and more dynamic market but having Dan Tuson from Natural England helped manage that risk, she says.