House building around the Solent has been hampered following concerns that nitrates were causing a range of negative environmental effects.

These include excessive growth of green algae which smothers and damages rare habitats and wildlife, including the Solent’s internationally protected estuaries, salt marshes and seagrass beds, as well as protected birds including curlews.

The government will now invest £3.9m to set up an online ‘nitrate trading’ auction platform.

Housing developers can use it to buy credits to create new habitats such as meadows, woodlands and wetlands – which will prevent harmful levels of nitrates from new housing from reaching the Solent’s rare wildlife and habitats.

Alongside this, a new 60 hectare nature reserve at Warblington Farm opened this week, which will be funded through the credits which housing developers purchase.

Environment Minister Rebecca Pow said: “I am thrilled to announce this funding which uses nature-based solutions to alleviate the housing pressure in the local area.

“Not only will this innovative scheme unlock thousands of much-needed homes for the local area, but it will provide habitat rich areas for wildlife in a true win-win.

“As the nation recovers from coronavirus, it’s more vital than ever that we build back greener, and this project will also help people connect with nature by providing more green spaces for them to enjoy.”

Natural England Chair Tony Juniper added: “This is a beautiful part of Hampshire, rich with wetlands, coastal inlets and shingle beaches, and it’s no wonder that more people wish to live in the area, creating demand for new homes.

“More people does, however, mean more nitrogen getting into the environment, and this is causing the growth of green algae ‘mats’ in the Solent, affecting protected habitats and wildlife along the south coast.

“This innovative new scheme that Natural England has helped design will not only help nature’s recovery in the area, but also address the historic demand for new housing around the Solent.”

The nitrate trading platform pilot will be rolled out over the next two years and delivered jointly with the Ministry for Housing, Communities and Local Government, Natural England and the Environment Agency.