Forward allocation agreements: reserving BNG units before permission
A forward allocation agreement reserves units from a registered gain site before planning permission is granted, usually through an option that fixes price and quantity for a period in return for a fee or deposit. It protects the programme where supply is scarce and the allocation on the register follows once permission is in place.
Key facts
- Allocation on the register normally follows planning permission; a forward agreement bridges the gap.
- Typical structure: option fee or deposit, fixed price, reservation period, long-stop date.
- Useful where supply is scarce, volumes are large or the consent timetable is fixed, including NSIPs.
- Terms are agreed directly between developer and provider; we make the introduction.
- Not every provider offers forward allocation; we flag those that do.
Last checked: 3 October 2026
When is forward allocation worth it?
- Scarce habitat types: hedgerow, watercourse, high distinctiveness area habitat.
- Large volumes that would exhaust local supply.
- Phased schemes where later phases need certainty.
- Infrastructure projects with fixed examination timetables.
What does an agreement usually cover?
| Term | What to agree |
|---|---|
| Quantity and type | Units by type and distinctiveness, with tolerance for metric changes |
| Price | Fixed or indexed, for the reservation period |
| Period | Long enough to cover decision and gain plan approval, with extension rights |
| Fee | Option fee or deposit and whether it is deducted from the price |
| Conditions | Permission granted, gain plan approved, allocation completed |
| Fallback | What happens if the metric changes or permission is refused |
What are the risks?
Paying for units you do not need if the metric falls or the option expiring before permission. Build in tolerance and extension rights. On the provider side, holding units off the market has a cost, which is why a fee is normal.
A worked example
A housebuilder expects to need 6 area units for phase two, due to start in 14 months. Local supply is limited and a nearby gain site has 9 unallocated units. The provider agrees an option: a fee of a few percent of the price reserves 6 units at a fixed price for 18 months, deductible from the purchase on completion, with a 10% tolerance for metric changes and an extension at indexed price. Permission is granted in month 11, the gain plan is submitted in month 12 with the units allocated and the fee is netted off the invoice.
What providers want in return
A fee or deposit, because reserved units cannot be sold elsewhere; a clear expiry; and a developer who is likely to complete. Green Acres BNG, which runs two gain sites, offers forward allocation on its own banks and we flag other providers who do.
Negotiating points
- Tolerance for metric changes, typically plus or minus 10%
- Whether the fee is deducted from the purchase price
- Extension rights if the decision slips
- What happens to the reservation if permission is refused
- Documentation the provider will supply at allocation
Key takeaways
- Reserve units before permission with an option or forward allocation
- Typical terms: fee, fixed price, period, tolerance, long-stop
- Most valuable for scarce types and large or phased schemes
- Allocation on the register still follows permission
Frequently asked questions
Is a forward allocation recorded on the register?
No. The register records allocations after permission. The agreement is a private contract until then.
Can the price be fixed for a year?
Often, sometimes with indexation. It depends on the provider.
Do fractional units suit forward allocation?
Less often. It is mainly used for larger or scarce requirements.
Does BNG Sourced by Green Acres BNG draft the agreement?
No. We introduce you to providers who offer it; you and the provider agree the terms with your own advisers.
Does the fee count as part of the unit price?
Usually it is deducted on completion, but agree it in the contract.
Can I reserve hedgerow or watercourse units?
Yes and it is often most valuable for those scarce types.
Sources
- Biodiversity net gain guidance, gov.uk
- Biodiversity gain site register
- Biodiversity gain plan guidance, gov.uk
Written by BNG Sourced by Green Acres BNG specialists and reviewed by Mike Dungait, Managing Director of Green Acres BNG, who has registered and manages two habitat banks. Indicative information, not legal or planning advice. Confirm with your ecologist and planning authority.
Related: BNG sourcing check, exemption checker, BNG unit prices, glossary, how to buy off-site BNG units, BNG for NSIPs.
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