Value of forestry market in UK continues to grow

Increased wood demand for biomass and construction together with weaker sterling has underpinned the UK forestry market this year, according to the latest industry review by land agents, Savills.

The company’s analysis showed the total value of the forestry investment market had increased by 24% to more than £112 million during 2017 compared to £909m in 2016.

However, despite the increase in the overall value of the market, figures showed that the total area of forestry sold across the UK actually fell to just over 18,000 hectares during 2017, representing a reduction of 8% on the same period in 2016 but in line with the mediumterm average.

The company’s head of forestry investment, James Adamson, said the sustained period of low interest rates had stimulated the UK’s forestry investment market.

“Forest ownership is perceived as straightforward, long term and low risk in uncertain times,” he said.

“Our research tells us that cash on deposit would have accumulated 19% in value before tax since the financial crisis of 2008, meanwhile tree-growing on a hill in south Scotland would have accumulated 35% over the same time.

“Throw in the inflationary growth in capital market value and the performance is boosted to over 80%.”

Mr Adamson added that the availability of suitable land at an appropriate price remained the biggest challenge.

Picture: Getty. Despite the increase in market value, the total area of forestry sold fell last year.