Atom Bank has launched a natural capital lending proposition aimed at supporting housing and infrastructure development through the creation of biodiversity net gain habitat banks.
The lender said an initial rollout had financed three habitat banks containing 480 biodiversity net gain (BNG) units, which could provide the biodiversity improvements required for about 2,410 new homes.
BNG habitat banks are areas where habitats are created or enhanced to increase biodiversity. Developers in England are generally required to deliver a biodiversity net gain of at least 10% as part of the planning process, with off-site habitat banks available when improvements cannot be delivered on the development site.
Atom Bank has provided secured funding to BNG Partnership for the conversion of low-value arable land into habitats at three sites: 21 hectares in Boxworth, Cambridgeshire; 40 hectares in Aldwincle, North Northamptonshire; and 20 hectares in Stockbridge, Hampshire.
Each site is registered on the Biodiversity Gain Site Register and subject to a 30-year management and monitoring commitment, secured through a section 106 agreement or conservation covenant.
Although housing has accounted for most demand so far, BNG requirements also apply to commercial, industrial, logistics, renewable energy, minerals and waste developments.
From 2 November 2026, the requirement is due to extend to nationally significant infrastructure projects, with a minimum biodiversity uplift of 10% across all project types.
Atom Bank said it had developed methods for managing changes in land values and loan-to-value ratios as agricultural land is converted into habitat banks. It has also introduced flexibility into its loan terms to accommodate potentially irregular repayments from developers.
The loans can be used to purchase or refinance land in England for the creation of BNG units. They are available to limited liability partnerships and limited companies, with advances ranging from £100,000 to £2 million at up to 65% loan to value against the land’s original value.
Edward Twiddy, director of ESG at Atom Bank, said: “Supporting the creation of BNG habitat banks is essential for the future of the housing sector. These projects will help unlock new homes as the government seeks to hit its ambitious housing and infrastructure targets.
“Atom bank is already innovating in this new market, deploying the flexibility and creativity for which we have become known in the commercial mortgage space. Now we are launching this proposition to a wider market and welcoming more applications.
“As a leading residential mortgage and SME loan provider, the health of the housing market, new commercial development and the provision of infrastructure to support our economy are essential to our own business, and this is a great opportunity to use our expertise and our willingness to move in line with a more sustainable and exciting future.”
Jason C Wright, director at BNG Partnership, added: “Buying land outright to create a habitat bank is the most demanding way to do it, but also the most secure. It means committing capital to the freehold years before a single unit is sold, with the benefit that we control delivery for the full 30 years.
“That certainty and transparency is what developers and planning authorities want to see.
“It was vital to find a financial partner with the foresight and commitment needed to build long term natural capital. Conventional agricultural lending does not cope well with land whose value and use are both changing as habitat is established, and few lenders have been willing to work on that basis.
“Atom’s financial insight and dedication to the environment is what has allowed us to create these three sites, providing a strong foundation in a fast-growing industry.”
