The UK forestry investment market has slowed following its decade of exceptional growth, peaking in 2022. According to the Savills publication Spotlight: Forestry there was an increase in marketed property from the previous forest year, but completed sales fall well below the 10-year average.
The total area of publicly marketed commercial forestry for 2024 was 13,000 hectares. This is the highest the sector has seen since 2019 but only converted to 8,100 hectares of completed sales across the UK during the 2024 forest year.
As a result the overall market has seen a fall in value compared to the 10-year average, correlating to the smaller area of hectares traded and the softening of average price. In 2024, the average gross value decreased by -11% to £15,500 per hectare, based on a comparison between 2023 and 2024 completed sales
“During the 2024 forest year, the total value of UK transactions rose by 3% to approximately £103 million, however this is significantly lower than the 10-year average of £157 million. Forestry values saw an exceptional rate of growth in the 10 years leading to 2022. Since then, the market has slowed and there has been a fall in the average value of timber properties, which is closely linked to the September 2022 mini-budget and a sudden rise in interest rates,” says Nicola Buckingham, Associate Director in Savills Rural Research team.
James Adamson, Savills head of Forestry Investment, commented: “The 2024 forestry market remained subdued, but we saw an increase from potential investors as the year progressed. With interest rates expecting to fall as well as more positive news surrounding timber pricing, we can expect some recovery of buyer interest in 2025, which will potentially reverse the negative price trends we have seen for this market over the last 2 years.”
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