Investment grows with time
Kirsty Mcluckie weighs up the advantages of buying forestry land
Tangible assets have the advantage as an investment over stocks and bonds of having an innate value, despite the vagaries of the market. Property is the prime example, but in terms of watching an investment appreciate in value there can be few asset classes quite as literal as putting your money in trees.
Tim Barratt of Bidwells’ forestry team says: “Forestry is a steady, reliable investment and the value of timber will literally grow as trees will put on around 3 to 5 per cent bulk each year.”
The forestry industry has undergone a renaissance in recent years, with a resurgence in popular public and political support and a growing appreciation of the wide-ranging benefits delivered.
From tourism to carbon storage, flood attenuation to landscape, there is much to recommend forestry, however it is the ethical economic credentials that are increasingly attracting would-be forest owners.
Barratt says: “When individuals or families invest in tracts of forestry there are also the advantages of amenity land. They may see a footprint for development or enjoy fishing or stalking rights as an added bonus.”
The UK’S forest industry is a relatively recent phenomenon, with a rapid expansion in the planting of commercial coniferous forests in the 1960s through to the late 1980s creating much of the woodland resource we see today.
In the intervening years, while the trees have been steadily growing, so too has the development of the forestry sector, with significant inward investment in state-of-the-art sawmills and processing sectors.
It is a well regulated industry, with high quality, sustainable products at its core.
The UK is a net importer of timber, with 60 to 80 per cent of our wood requirements being brought in from elsewhere.
This reflects the increasingly global nature of timber supply and demand, with many, including the Food and Agricultural Organisation of the United Nations, forecasting constrained supplies of timber over the next decade.
The supply and demand dynamic, in a period of historic low interest rates and volatile investment and currency markets, means investment in forestry is a popular consideration.
Ownership has a broad appeal and attracts a wide range of investors with different budgets, from first-time landowners seeking to own a small corner of the countryside, to those looking for a medium to long-term return and enjoyment from their land.
There are also larger institutional investors, such as pension funds, who see safe and steady returns from an ethical investment.
Entry level purchase prices start from just a few thousand pounds and Barratt says that many see forestry as a fundamental part of an investment portfolio. “Forestry is a safe investment and together with gilts, bonds, property and shares has a place in a diverse portfolio,” he says. n Bidwells has a selection of forestry property for sale, priced from £45,000 to offers over £3.2 million. www.bidwells.co.uk