UK forestry market stabilises after two-year decline

The UK forestry market is exhibiting indications of recovery following a two-year decline, with high-quality plantations commanding substantial values and renewed interest from investors.

In 2024, the average values for plantations in the UK forestry market decreased further, dropping approximately 10% to £18,900 per stocked hectare. However, a new report reveals a more intricate scenario than the headline figures imply.

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“We continue to witness strong prices for well-placed, high-quality UK forestry plantations,” stated Simon Hart, head of forestry at John Clegg & Co in Scotland.

“Values exceeding £ 20,000/ha are still common, with occasional peaks reaching £ 30,000/ha.”

A significant factor contributing to the perceived decline in average prices is the decrease in the average yield class of sold forestry, which has dropped from 19. 1 in 2023 to 16. 2 in 2024.

“Crops with lower yields understandably hold less value, which explains the apparent reduction in average values when analysing year- on- year data,” Mr. Hart noted.

In total, 29 forests were sold in Britain during 2024, a rise from 20 in 2023 but still below the five- year average of 44.

The market value approached £94 million, more than doubling the 2023 figure (£45 million) but falling short of the five- year average of £151 million.

Sales prices in 2024 averaged 107% of guide prices, slightly above the prior year, although it remains below long- term trends. The majority of sales took place in Scotland, in accordance with typical market behaviour.

Looking forward, Mr. Hart shared a cautiously optimistic outlook: “We continue to observe strong interest in quality properties, with several sales concluded or under offer in the first quarter of 2025, along with new funds entering the market.

“In general, we anticipate steady demand for woodlands and do not foresee significant changes in values,” he added.

However, according to John Clegg & Co’s report, demand appears to be waning for more isolated forestry sites predominantly featuring pine and lower growth rates.

This, coupled with stagnant timber prices and increasing harvesting and haulage costs, has pressured net returns, which are increasingly visible in sale prices.

Despite these challenges, the long-term fundamentals are strong: global timber demand continues to rise, and declining interest rates are expected to bolster investment.

While upcoming modifications to business property relief (BPR) in April 2026 and changing trade tariffs, particularly in the US, are being observed closely, they have yet to affect UK forestry values significantly.

With several transactions already advancing into Q1 2025, John Clegg & Co anticipates a stable year ahead for the sector, fuelled by interest in well-managed, strategically positioned plantations.