Demand for woodland outstrips supply

The average price paid for UK commercial forests over 25ha rose to £200,000 in 2003, with demand for quality woodland now exceeding supply, according to a new report.

The latest Forest Market Report by Tilhill and FPD Savills says the average size forest (143ha) was worth £201,000 last year – the highest recorded since the report was first published. Total value of sales was £19.7m, up £1m on 2002.

Simon Hart, of Sterling-based Tilhill, said the tangible and environmentally-friendly nature of forests will continue to attract market interest, while increases in grant aid for husbandry and maintenance, together with the predictable, low-risk reputation of forest investments, should further fuel demand.

FPD Savills said capital growth and inheritance tax mitigation are the main reasons why people buy woodland, with "local interest" cited as part of the purchasing requirment.

Meanwhile, the Small Market Woodland Report, also published by Tilhill and FPD Savills, shows that the dream of owning a small plot of woodland is fuelling the sector. Many estate agents are reportedly now targeting adjacent residential owners when woodland comes on the market.