Conservation Covenants: What landowners and farmers need to know

14th Nov 2025

Author: Michael Bracegirdle

Most property owners are familiar with covenants that control everyday use of their Property. A covenant might, for example, prevent you from parking a caravan or boat on the drive, restrict certain building works, or stop you running a business from home.

A Conservation Covenant is different. It is a private, voluntary agreement between a Land Owner and a Responsible Body, created under the Environment Act 2021, to look after the natural or heritage features of land for the public good. The agreement is usually set out in a formal deed and the parts that describe what each party must or must not do become legally binding as the Conservation Covenant itself.

Mike Bracegirdle explains more.

What is a conservation covenant?

In simple terms, a Conservation Covenant is about securing long term environmental or heritage benefits on a particular piece of land. It can relate to:

• the natural environment or natural resources on the land; or
• land with archaeological, architectural, artistic, cultural or historic importance, or its setting.

Common examples include:

• maintaining wetlands or woodlands;
• creating species rich grassland;
• restoring historic features;
• allowing parts of a holding to rewild.

Who can be the “responsible body”?

A Responsible Body must be formally designated by the Secretary of State before it can enter into a Conservation Covenant.

As at August 2025 there are 33 designated Responsible Bodies in England. They include:

• Local Authorities and National Park Authorities;
• conservation charities and Wildlife Trusts;
• private companies specialising in habitat banking and environmental projects;
• public bodies such as the Environment Agency and Natural England.

The Responsible Body will normally be responsible for monitoring the site and enforcing the covenant terms where necessary.

How long does a conservation covenant last?

A Conservation Covenant can be:

• for a fixed period, for example 30 or 40 years; or
• in perpetuity, with no end date.

For Biodiversity Net Gain (BNG) projects, habitats must usually be secured for at least 30 years, whether by a Section 106 Agreement with the Local Authority or a Conservation Covenant with a Responsible Body.

Once completed:

• the covenant is registered as a local land charge;
• it binds future owners and occupiers of the land, not only the original land owner;
• it must be disclosed on a sale and will also bind anyone who inherits the land.

For family farms, entering into a Conservation Covenant is therefore a generational decision.

How are conservation covenants being used in practice?

1. Off site Biodiversity Net Gain units

Many developers now deliver some or all of their BNG requirements off site by buying biodiversity units from dedicated habitat banks. To register an off site biodiversity gain site with Natural England, the land must be secured either by:

• a Section 106 Agreement with the Local Authority; or
• a Conservation Covenant with a Responsible Body.

By spring 2025 there were already over 100 biodiversity gain sites on the national register, with more than 30 of those secured by Conservation Covenant, and the numbers are increasing as BNG becomes more established.

For land owners and farmers this can create opportunities to:

• generate long term, often index linked income from habitat creation;
• move lower yielding land into nature recovery;
• support nearby development without selling the freehold.

2. Private land management and green finance

Water companies, infrastructure providers and other private sector organisations are beginning to use Conservation Covenants to secure natural flood management, water quality improvements and similar outcomes on third party land.

For example, a water company may agree to make annual payments to a Land Owner who manages upstream farmland in a way that slows water flow and reduces flood risk, with the Conservation Covenant providing long term security for that arrangement.

The covenant gives investors and funders confidence that the agreed management will continue for the full term, even if the land is sold.

3. Alternative to land purchase for charities

Conservation charities and community groups can use covenants to secure long term environmental management on privately owned land, without having to buy the land outright.

A charity might, for example, fund habitat restoration works while a Conservation Covenant ensures future owners must continue to manage the land for nature.

4. Supporting “30 by 30” and family legacy

The UK has committed to protecting 30% of land and sea for nature by 2030. Conservation covenants are one of the legal tools that can help demonstrate and secure that protection on the ground.

For family farms, they can also be used to “lock in” a long term environmental or rewilding project, so that future generations benefit from an agreed income stream but are also obliged to maintain the conservation use.

Tax and Agricultural Property Relief – where do conservation covenants fit?

There has been long standing concern that moving land into environmental schemes could put Agricultural Property Relief (APR) from Inheritance Tax at risk, especially where active farming reduces or stops.

Following the 2024 Autumn Budget, the government has confirmed that APR will be extended from 6 April 2025 to cover land managed under qualifying environmental land management schemes and similar agreements, including arrangements with approved Responsible Bodies.

Current guidance indicates that:

• relief will be available where the land was agricultural land for at least two years immediately before it moved into environmental management;
• qualifying land will be valued at market value on the basis that its use is restricted to environmental management;
• the extended relief is intended to cover environmental agreements with relevant public bodies and Responsible Bodies, which is likely to include many Conservation Covenant arrangements, subject to detailed rules.

The Inheritance Tax position will always depend on the structure of the arrangements, the wording of the covenant and how the land is used in practice, so it is important to obtain up to date tax advice as well as legal advice.

Practical points for landowners and farmers

Before entering into a Conservation Covenant, it is sensible to think about:

• Your objectives
  Are you aiming for regular income, long term capital value, nature recovery, or a combination?
• Term and flexibility
  How long will the covenant last and how much day to day flexibility will you have to farm, graze or alter management if circumstances change?
• Impact on value and borrowing
  A covenant that restricts what can be done with the land may reduce its open market value and affect how much a bank is prepared to lend against it. Lenders may also need to consent before you enter into a covenant.
• Family discussions
  For a family farm or estate, it is important to discuss the proposal with the next generation, as they will live with the long term consequences.
• Due diligence when buying land
  If you are buying a farm or block of land, make sure searches and enquiries check for existing Conservation Covenants or BNG agreements so that you understand any obligations you will inherit.
• Professional advice
  Take specialist legal advice on the covenant itself and professional tax advice on APR and wider Inheritance Tax planning.

 

How Butcher & Barlow can help

Conservation covenants can unlock useful opportunities, but they are also serious, long term commitments that affect future generations and the value and use of your land.

Butcher & Barlow’s Agricultural and Commercial Property Team has experience advising Land Owners, Farmers, developers and Responsible Bodies on Conservation Covenants, Biodiversity Net Gain projects and environmental land management.

If you are thinking about entering into a Conservation Covenant, or you are buying or selling land that may already be subject to one, we can help you to:

• review and negotiate the covenant terms;
• understand how it will affect your land use, value and borrowing;
• work with your accountant or tax adviser on APR and wider succession planning.

If you would like to discuss how Conservation Covenants could work on your land, please get in touch with the Team.

 

 

The information in this article was correct at the time of publication. The information is for general guidance only. Laws and regulations may change, and the applicability of legal principles can vary based on individual circumstances. Therefore, this content should not be construed as legal advice. We recommend that you consult with a qualified legal professional to obtain advice tailored to your specific situation. For personalised guidance, please contact us directly.