March 18th, 2026. Tom Lee
Nutrient Neutrality: Why Is It Still Blocking Permissions And What Can developers Do About It?
Nutrient neutrality is a legal gating item under the Habitats Regulations: if a scheme increases nitrogen and/or phosphorus loading to protected sites, the Local Planning Authority cannot lawfully grant permission unless it can conclude that there is “no adverse effect”. This is done through either a Habitats Regulations Assessment (HRA) or an Appropriate Assessment (AA) with secured mitigation, which can often result in slower approvals.
A Timeline Of Changes
Pre-2022: Nutrient impacts existed in HRA practice, but were inconsistently applied across catchments.
2022:
- The Government issued a letter acknowledging Natural England’s updated nutrient advice, and the resulting implications for decision-making in affected catchments.
- Natural England publicly reinforced the shift: developments must be assessed/mitigated so that protected sites aren’t harmed.
2023:
- Natural England launched its credit scheme, giving developers a route to buy nutrient mitigation credits.
2024:
- Defra published a notice designating “sensitive catchment areas”, formalising where the policy focus applies.
- The Planning Advisory Service set out the Local Nutrient Mitigation Fund approach, including £47m released to help Local Authorities with mitigation.
2025:
- The Supreme Court confirmed that AA/HRA issues can bite at later stages (such as during reserved matters/discharge of conditions), not just at outline consent. This created a significant commercial risk for developers who previously would’ve addressed these issues at the tail-end of a project.
- The Planning And Infrastructure Act introduced Environmental Delivery Plans (EDPs) and a Nature Restoration Levy, changing requirements from bespoke, scheme-by-scheme mitigation to more widely applied catchment-scale solutions.
2026
- Natural England is reportedly preparing 16 pilot EDP areas (moving from legislation into implementation in the real world).
How Nutrient Neutrality Slows Planning
1) It Adds Requirements for Additional Information
If your site is within an affected catchment, the Local Authority needs enough information to complete HRA/AA. If you submit without:
- A nutrient budget calculation
- The correct methodology for that catchment
- Secured mitigation
Then the LPA often has no lawful basis to approve, even if everything else is acceptable.
2) Deliverability Is Still A Bottleneck
There are now additional challenges around delivering mitigation, including:
- Finding mitigation land in-catchment
- Confirming legal agreements (s106)
- Aligning with water companies/waste water treatment.
Even when buying off-site credits (for schemes which aren’t geographically limited), availability, tranche timing, and Local Authority acceptance still create programme risk.
3) Relying On Reserved Matters Has Become Dangerous
Thanks to the Supreme Court ruling, relying reserved matters, or leaving it until later on to resolve HRA issues is now a major commercial risk, and can result in:
- Outline consent that can’t be implemented as expected
- Reserved Matters being blocked until mitigation is proven
4) It Exposes Resourcing Gaps
Even where Local Authorities are on board with a development, HRA capability is stretched, and schemes are competing for the same mitigation supply. Planning Advisory Service funding can help, but it cannot create wetlands, land agreements, or monitoring frameworks.
Our Advice To Developers
- Treat nutrient neutrality like utilities capacity – Run it at the same stage you’d run:
- Foul capacity enquiries
- Highways strategy
- Viability testing
- Build an HRA submission pack – For affected catchments, aim to submit with:
- A nutrient budget
- A mitigation route already chosen (on-site reduction, off-site land, or credits)
- A draft legal mechanism (UU/s106) ready to seal quickly,
- Evidence of deliverability (land control, management plan, monitoring, duration).
- Choose the right mitigation route:
- On-site measures help but often won’t get you to neutral alone
- Off-site land-led mitigation can be best value if you can control land and get legal comfort, but it’s slower and more consultant-heavy
- Credits can be fastest, but availability, pricing and local acceptance can vary between developments.
- Finance implications – If you’re raising debt/equity, expect these questions:
- Is nutrient mitigation fully costed in the appraisal?
- Is it a planning condition precedent to start?
- What’s the realistic timeline to secure mitigation and discharge conditions?
- What is your plan if the mitigation route fails or policy shifts?
The Outlook For The Next Year:
- There is a policy push toward catchment-scale solutions, but implementation will be phased, and the market will have a messy transition period where some areas have pilots and others still have bespoke mitigation.
- Legal risk has increased: courts have made it harder to treat HRA as a “later problem.”
Conclusions For Developers
If nutrient neutrality is in your catchment, it is not a planning delay risk – it is part of the permission itself. Developers should:
- Price some added planning time in from day one
- Secure mitigation early
- Submit an assessment-ready application that the Local Authority can prove is legal
Article By Tom Lee
March 18th, 2026
Tom is one of the founding members of the company and has been a part of the Pure Group since 2013 playing an integral part of the business’s growth and direction.
He had over 10 years of experience in the real estate financial sector prior to joining Pure with a major bank. Tom has a wealth of experience providing debt advisory on large, complex deal structures for developers and investors across all asset classes, throughout the UK and parts of Europe.
He has built a strong network across the property and finance sector, which enables him to provide a total package solution to his clients and contacts, with whom he has built long standing relationships.
Email: tom@purestructuredfinance.co.uk
Follow Tom on LinkedIn here.
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