Market Watch
Do you know about nutrient neutrality? It’s stalling the building of 120,000 new UK homes. Find out more about this growing issue and how it might affect you.
Is your development nutrient neutral?
Before you undertake any development, it’s important to be aware of nutrient neutrality rules.
Issued by public body, Natural England, and currently impacting 74 councils and planning authorities, the Home Builders Federation says the regulations are holding up the building of around 120,000 new homes across the UK – that’s 40% of the Government’s target of 300,000 new homes a year. So be in the know about this growing issue and how it might affect you.
Local Authorities affected by the new rules. Image credit: Savills
Nutrient neutral – the background
Over the past few years there have been concerns over rising levels of phosphates and nitrates in our rivers, estuaries and wetlands. The Environmental Advisory Committee reports only 14% of the UK’s rivers achieve a ‘good’ ecological status; the rest are contaminated by chemicals from sewage, agricultural run-off and road pollution.
It’s widely agreed that housing developments add to the problem – extra wastewater/sewage from new homes and construction site run-off increases phosphorous and nitrogen levels which speed up algae growth in water, damaging protected sites.
In 2018, following an EU Court of Justice ruling, Natural England advised ‘no developments should be permitted near protected sites unless they’re proved to be nitrate and phosphate neutral. In March 2022, Natural England ruled no new developments are allowed in protected site catchment areas if they cause higher levels of phosphates and nitrates in the waterways.
The Government is resisting calls to impose tougher guidelines on developments that pollute nearby water bodies, recognising it would increase an already unprecedented backlog.
What’s nutrient neutral?
Natural England will assess the impact of contaminants at the planning stage and give permission for developments that demonstrate nutrient neutrality. So if you’re looking to develop in a protected site catchment area, ensure your project is nutrient neutral.
This means calculating how many nitrates are entering the water system from your development and offsetting it by removing an equivalent amount, for example through re-wilding a section of farmland or sterilising part of the development area.
There are offset schemes where you can purchase credits, similar to biodiversity net gain credits, to fund mitigation schemes in the development area.
Alternatively, you could have on-site treatment works that neutralise phosphates and nitrates or dispose of them safely when discharging wastewater to the sewage system, for treatment by the water authorities.
Nutrient calculator
So how do you calculate the nutrient impact of your development? Use a recognised phosphate calculation tool and complete a Habitats Regulation Assessment – this will show if you’re contributing to increased nutrient levels. Natural England has advice on achieving nitrate neutrality and calculating nutrients for planning applications.
Nutrient neutral – looking ahead
Because this issue is evolving, the government, local authorities, developers and architects are looking for solutions; including introducing new wetlands, retrofitting sustainable urban drainage systems, upgrading water recycling centres and installing water treatment plant solutions.
While there may be little clarity on how this issue will be resolved – perhaps through Section 106 planning obligation agreements or council-led projects – it’s clear the nutrient pollution problem will put additional pressure on developers. The Home Builders Federation estimates the extra time and costs involved in the planning process will increase house prices by £5,000.
In August 2023, the government proposed amendments to the Levelling Up and Regeneration Bill that would ‘do away with the red tape of the legacy EU laws,’ adding a new section that required local planning authorities to ‘assume that nutrients in urban wastewater from the proposed development…will not adversely affect the relevant site’ (gov.uk).
However, the amendments were blocked in the House of Lords, defeated by 203 votes to 156. Environmental groups and opposition parties argued that the change to the bill would further ‘harm our waterways and ecosystems’ and fails to protect the environment (bbc.co.uk).
Development finance for your nutrient neutral project
As the UK’s first comparison site for development finance and bridging loans, Brickflow connects borrowers to lenders in seconds. With nutrient neutrality and rising build costs increasing the financial burden on property developers, it is more important than ever to find the right finance, with competitive loan terms, rather than a mediocre finance deal.
Our online tools enable you to:
Brickflow delivers lenders’ estimates in two minutes (it historically takes six weeks), and typically completes the whole credit approval/final loan offer process in six weeks (usually six months).
Loan offers range from £150k-£150+m and our lenders report their conversion rate from Heads of Terms to loan completion is 90+%.
Development finance funding
Brickflow is the most efficient funding process, saving you time, money and resources. And the more efficient the development finance process, the quicker your project can become a reality, benefitting the UK housing market.
Find out more about our non-exec director, Tim Noble. He’s keen to share his 30+ years development finance experience with you.
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