What is Water Neutrality? The 2026 Position for Planning

Water neutrality is a planning requirement that a development must not increase the total amount of water taken from the environment for public supply across a defined area. The extra demand created by new homes or buildings has to be cancelled out: demand is first minimised through water efficiency, then whatever remains is offset elsewhere, so overall abstraction stays flat.

As a formal planning test, water neutrality has only ever applied in one part of England, and it was withdrawn there on 31 October 2025. What replaced it is a reduced abstraction licence, a habitat recovery package, and a finite pool of water savings that carries a review date. This guide sets out what water neutrality means, where it applied, how it was demonstrated, what the withdrawal is based on, and what a scheme in the zone should do now. Where a site's water, drainage or flood position is still open, a flood risk assessment for planning and a surface water drainage strategy remain the evidence an application turns on.

Water neutrality has only ever been a formal planning test in the Sussex North Water Supply Zone, and the four-year brake it placed on roughly 21,000 homes was lifted on 31 October 2025.

What does water neutrality mean?

Water neutrality means that, across a defined supply area, total water use after a development is completed is no greater than it was before. Natural England defined it as water use in the supply area being the same before development as after it. A scheme reaches that position in two stages. It cuts its own demand as far as practicable, then offsets whatever demand remains, so there is no net rise in the water abstracted from rivers, aquifers and other sources.

A water-neutral building still uses water. The test operates on the supply area, protecting the wider water environment from the cumulative effect of growth where abstraction is already damaging protected habitats. That is why it has only ever applied in specific, environmentally sensitive locations.

• Minimise first. Design the scheme to use as little water as possible, well below the standard Building Regulations figure.
• Offset the rest. Save an equivalent volume elsewhere in the same supply zone, so the books balance.
• Prove it in a statement. A water neutrality statement sets out existing and proposed consumption and shows the net position is flat or negative.

Is water neutrality still required in Sussex?

No. Natural England withdrew its September 2021 position statement on 31 October 2025. New development in the Sussex North Water Supply Zone has been able to proceed without demonstrating water neutrality since 1 November 2025. The withdrawal followed a Defra announcement on 8 October 2025 and a Hardham Basin Environmental Study commissioned by Southern Water, which examined whether the aquifer feeding the Hardham source is hydrologically linked to the Arun Valley habitats.

On the strength of that work, Natural England concluded that new development supplied by groundwater abstraction at Pulborough is not likely to have a significant effect on the three protected Arun Valley sites. Two things underpin that conclusion. The first is a set of licence modifications cutting how much Southern Water may abstract. The second is a package of habitat recovery measures at Pulborough Brooks delivered by the RSPB: water level management, ditch profiling, sediment removal, invasive species control, and ongoing hydrometric and ecological monitoring.

The exact wording matters. Anyone reading a consultation response on a site in the zone will meet it. Natural England's withdrawal statement told the authorities in the zone that they do not need to undertake an appropriate assessment, or consult Natural England, on water scarcity issues affecting the Arun Valley sites. Every other Habitats Regulations obligation is untouched: an appropriate assessment is still required, and Natural England is still consulted, wherever a scheme raises any other impact on a European designated site.

What is the Sussex withdrawal based on?

On two things: the reduced abstraction licence, which is the permanent basis, and a finite pool of water savings covering the period until it takes effect. Natural England's Senior Officer for Sussex set the interim mechanism out in a letter to Horsham District Council on 10 November 2025. Schemes in the zone can be treated as water neutral by drawing on Southern Water's water efficiency savings from 2024/25, a measured pool of 3.24 megalitres a day, and Natural England will not object to applications benefiting from them. That pool is not open-ended.

The savings pool behind the interim position is 3.24 Ml/day, and Natural England set its advice to be reviewed after 12 months or once those savings are exhausted, whichever comes first.

A joint statement issued by Horsham District Council and West Chiltington Parish Council on 6 January 2026 sets out how that works in practice. All new development in the district is deemed water neutral against Southern Water's 2024/25 efficiency savings, and applicants no longer need a bespoke planning condition, a section 106 clause, or a payment into an offsetting scheme to demonstrate compliance. The same statement puts the modified abstraction licence at March 2026. It also asks the examiner of the West Chiltington Neighbourhood Plan to recommend removing its water neutrality policies, on the basis that the development plan no longer needs them.

Two dates govern any scheme still in the system: the date the modified licence was actually issued, and the date the 12-month review of Natural England's advice falls due. Both are questions for the case officer, not assumptions to make.

Why water neutrality became a planning issue

Water neutrality entered the planning system through the Conservation of Habitats and Species Regulations 2017, known as the Habitats Regulations. In September 2021, Natural England issued a position statement warning that water abstraction in the Sussex North Water Supply Zone risked harming internationally protected wetland habitats in the Arun Valley, designated as a Special Area of Conservation, a Special Protection Area and a Ramsar site.

The concern was cumulative, not site by site. Southern Water's abstraction at Hardham draws on groundwater linked to those habitats. Natural England judged that additional demand from new development could push abstraction to a level that adversely affected the qualifying features of the sites, among them the little whirlpool ram's-horn snail, a rare species the designations protect. To satisfy the Habitats Regulations, every scheme in the zone had to show it would be water neutral before permission could be granted. Development across much of the sub-region stalled for four years, delaying around 21,000 homes, roughly 4,000 of them already in the planning system.

1. September 2021. Natural England issues the position statement; schemes in the zone must demonstrate water neutrality.
2. 8 October 2025. Defra announces that the requirement is to be lifted.
3. 31 October 2025. Natural England withdraws the position statement; schemes proceed from 1 November.
4. 10 November 2025. Natural England confirms the 3.24 Ml/day savings pool and a 12-month review of its advice.
5. 6 January 2026. Horsham District Council confirms development is deemed water neutral and no bespoke conditions are needed.
6. March 2026. The modified Southern Water abstraction licence is expected to take effect.

Where water neutrality applied in England

As a formal planning test, water neutrality applied only in the Sussex North Water Supply Zone: most of the Horsham and Crawley districts and the part of the Chichester district north of the South Downs, the area served by the Hardham source near Pulborough.

• Horsham and Crawley. Horsham District Council and Crawley Borough Council covered most of the affected zone. Site-specific requirements are set out on Unda's Horsham flood risk and drainage and Crawley flood risk and drainage pages.
• Chichester. Chichester District Council applied it to the part of its district north of the South Downs, covered on the Chichester flood risk assessment page.
• The wider zone. The South Downs National Park Authority applied it to the protected landscape within the zone, and West Sussex County Council set out the zone-wide position.

The habitats the designation protects sit on the River Arun, which falls fast off the Weald clay above Horsham before running into one of the longest tidal reaches in southern England. Development in the same catchment now meets a separate and tightening set of drainage expectations, including Arun's five SuDS design checklists.

South East England is classified by the Environment Agency as seriously water stressed, so the underlying pressure was never unique to Sussex. Greater Cambridge is the other area most associated with water scarcity in planning. The mechanism there is different. Growth is managed through tight local-plan water efficiency policy and long-term water resource planning, with new supply infrastructure expected in the early 2030s, and no Habitats Regulations neutrality test applies.

How water neutrality was demonstrated

Where water neutrality applied, an applicant demonstrated it through a water neutrality statement showing that total water use would not rise. The statement set out existing and proposed consumption in litres per person per day and explained how neutrality was reached through two combined stages: minimisation, then offsetting.

Minimisation meant designing the scheme to use as little water as possible. The benchmark was the optional tighter Building Regulations standard under Part G — 110 litres per person per day, calculated with the Water Efficiency Calculator for new dwellings, against a baseline requirement of 125 litres. Water-neutral schemes typically pushed well below the optional standard, to between 85 and 100 litres per person per day. Low-flow taps, showers and dual-flush WCs did most of the work, with rainwater harvesting and greywater recycling reusing water on site where the scheme could carry them. Where rainwater harvesting is proposed, its treatment in a drainage submission is a separate question, covered in Unda's guide to rainwater harvesting in SuDS design.

Offsetting dealt with the demand left after minimisation. Because a new home still uses water, neutrality was only reached by saving an equivalent volume elsewhere — typically by retrofitting water efficiency measures into existing buildings within the same supply zone, sometimes traded as water neutrality credits. The offsetting had to happen inside the zone drawing on the affected source; savings made on water drawn from a different area did not count, because they did not relieve pressure on the protected habitat.

For most residential schemes the evidence trail needed per-person consumption figures for both the existing and the proposed use of the site. Where existing buildings were being demolished and replaced, metered water bills from the previous few years were the strongest evidence of the baseline demand being removed.

Water neutrality and nutrient neutrality compared

Water neutrality and nutrient neutrality are frequently confused, and they address different problems. Water neutrality is about water quantity: stopping abstraction from rising and damaging habitats that depend on water levels. Nutrient neutrality is about water quality: stopping additional nitrogen and phosphorus from new development reaching protected rivers, lakes and estuaries where nutrient pollution is already causing harm.

Both stem from the same Habitats Regulations duty, and both have been caught up in wider reform. The Planning and Infrastructure Act 2025 created a Nature Restoration Fund and Environmental Delivery Plans, letting developers pay a levy into a strategic mitigation scheme rather than solving the problem site by site. The first Environmental Delivery Plan was published for consultation on 17 September 2026, covering central and eastern Norfolk — the River Wensum, the Bure Broads and Marshes, and the Yare Broads and Marshes — and is expected to support up to 15,780 homes. Unda's full guide to nutrient neutrality sets out the catchments, the nitrate-versus-phosphate distinction and the mitigation routes in detail.

Water efficiency after water neutrality: the Part G reform

This section covers a related requirement, not water neutrality itself, and it is the change most likely to affect a scheme in a water-stressed area next. Defra consulted between 23 September and 16 December 2025 on tightening the water efficiency standards in Part G of the Building Regulations. The proposals would cut the minimum standard from 125 to 105 litres per person per day, and the optional tighter standard from 110 to 100 litres in water-stressed areas, alongside a revision of the water calculator and the fittings-based method behind it.

Defra's consultation notes that actual consumption in some new homes reaches 195 litres per person per day, against a minimum standard of 125.

The wider commitment behind the proposals is an average of at least 122 litres per person per day by 2038, on a trajectory to 110 by 2050. Implementation was proposed for 2026 with a six-month transitional period, and Water UK backed the 105-litre figure in August 2026. No government response to the consultation had been published as at September 2026, so the current standards remain 125 and 110 litres.

The practical consequence is straightforward. The water efficiency design work that water neutrality forced on Sussex schemes is heading towards being standard nationally, at a level not far off what those schemes were already achieving. Those same measures interact with drainage design, because on-site reuse changes the volumes a drainage strategy has to convey and attenuate, and they sit alongside the SuDS discharge hierarchy a SuDS strategy has to work through. The regulator that would police all of this is itself in flux. The Clean Water Bill announced in the May 2026 King's Speech would merge Ofwat, the Drinking Water Inspectorate and the water functions of both the Environment Agency and Natural England into one body. Despite the headlines, Ofwat had not been abolished as at September 2026, and the Bill had not reached Parliament.

What this means for a scheme in the Sussex North zone now

For sites in the zone, a standalone water neutrality statement and offsetting package are no longer needed to satisfy the Habitats Regulations, which strips cost and delay from schemes that had been held up. Four things still need checking.

• Confirm the position with the local planning authority. Local-plan policies on water efficiency remain in force, and the modified abstraction licence was still being finalised at the start of 2026.
• Deal with conditions and obligations already imposed. The South Downs National Park Authority has confirmed applicants may seek to vary existing water neutrality conditions and legal agreements; a permission granted before November 2025 does not shed them automatically.
• Design to the tighter water efficiency standard anyway. With Part G under revision and the South East seriously water stressed, a scheme designed at 110 litres per person per day or better is unlikely to be asked to go backwards.
• Keep the other water evidence in order. Flood risk assessment and drainage requirements were never affected by the water neutrality question, and the NPPF flood risk policies have tightened over the same period.

Water neutrality was one of several water requirements that can shape, or stall, an application. Flood risk assessment and drainage design are the others, and neither has gone anywhere. In a climate of more frequent drought punctuated by intense rainfall, and with rivers swinging further between the two extremes, managing water carefully on both fronts is increasingly what authorities expect. Unda prepares flood risk assessments for planning, surface water drainage strategies and foul drainage strategies across England and Wales, and its chartered flood risk consultants return a tailored quote within 60 minutes.

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