John Clegg & Co’s annual Forest Market Review, which was published in April, shows that the forestry market proceeded with caution in 2024, just as it did in 2023. Average plantation prices were down by about 10%, but the company, which is part of Strutt & Parker, believes the value of good quality plantations moved little over the year.
“The cautious optimism we predicted last year had a little more caution and somewhat less optimism than anticipated,” said Simon Hart, head of forestry, Scotland. “Timber prices were largely flat, interest rates remained higher for longer than many predicted and global conflicts showed few signs of resolution.”
However, he added that the forestry fundamentals remain strong, with new investors being attracted into the sector. Global timber demand is rising, domestic house building remains a priority and timber is the best construction material if one is serious about tackling climate change, he said.
“We predicted the new government would have little impact on the market, but did not anticipate the curve ball of it altering the Business Property Relief allowances for inheritance tax (for which commercial forestry qualifies). However, despite this forthcoming change we cannot discern a clear market price response.”
Mr Hart cautioned that comparing yearto- year trends with a variable and relatively small sample size is always dangerous, but that the Forest Market Review clearly shows that values were down 10-20% from their peak in 2021/2022.
“The market value is down on the longterm trend at a little under £100m,” said Mr Hart. “Forest owners tend to be in it for the long term, but we can also see they are opportunistic. When demand and prices were high in 2020-2022, some owners were tempted to sell. As prices fell back, there were many fewer transactions in 2023 and 2024, with most owners able to take a longer-term view and wait for a price recovery.
“Average values were down by 10% in 2024, but take out two unusually low values and that drop is reduced,” added Mr Hart. “We also like to try and dig into the data. For example, in 2024 the average yield class is recorded at 16.2 compared to 19.1 in 2023. With an average age of 28, that yield class difference would translate to a reduction of 100 tonnes/hectare for a no thin Sitka spruce crop, worth, say, £4,000/ha plus. That is more than the year-on-year fall in values.”
An important market indicator is the gap between guide prices and sale prices. In 2024, sale prices were 107% of guide. This was down on the five-year trend, but up slightly on 2023, suggesting a steady market.
Most properties that came to the market found a buyer and 54% did so within six months of first being launched. This was down on the five-year trend. John Clegg noted that more properties took more than 12 months to find a buyer. This was a rare event in the boom years of 2020-2022 and further indication of a cautious market.
Woodland values are affected by many factors including location, accessibility, species, soils and slopes. Most of the highest prices continue to be paid in the uplands of south Scotland for spruce-dominated second rotation crops. Values over £20,000/ha are common, with £30,000 occasionally achieved.
“Woodlands are coming to the market with associated carbon credits, or on occasion where credits have been sold but the concomitant liabilities remain with the woodland,” said Mr Hart. “The woodland carbon market remains small scale and is not well established, so reliable pricing is not available. One woodland with over 50,000 carbon units was offered for sale but was withdrawn when market appetite did not meet the seller’s expectation.”
Demand for planting land remains strong, but values have reduced over the past year. Prices of up to £10,000/ha are being paid for the best sites, but buyers are looking very closely at potentially plantable areas and anticipated yield classes. Such values generally remain above the agricultural value of hill ground, but the margin is shrinking.
This differential is key if the various UK governments’ planting targets are to be met, said the report.
MARKET OUTLOOK
Looking to the current situation, prices have remained fairly steady into 2025, with a steady turnover of commercial woodlands. With good properties continuing to sell well and new funds being drawn into UK forestry, John Clegg remains cautiously optimistic for 2025.
“The forestry fundamentals remain positive with substantially rising global demand for timber,” said Mr Hart. “The UK governments all have expansionist forestry policies, and the ‘green agenda’ remains in place. However, progress can be constrained by funding limitations and regulatory complexities. For instance, in Scotland, there is not sufficient funding for the level of planting grants needed to support official planting targets. Throughout the UK, regulatory processes can also present challenges to woodland expansion.”
And, on the subject of planting, speaking in June, Mr Hart expressed disappointment on the latest woodland creation figures (https://www.forestresearch.gov.uk/tools-andresources/statistics/publications/woodlandstatistics/ ).
“The sharp decline in new woodland planting in the UK – from 20,600ha in 2023/24 to just 15,690ha in 2024/25 – is deeply disappointing,” he said. “It puts the forestry sector at some distance from the government’s stated ambition of planting 30,000ha per year.
“Although there are some encouraging signs, such as increased planting in England, Wales, and Northern Ireland, the overall picture remains troubling,” continued Mr Hart. “England has reached its highest level of planting in over two decades at 5,770ha, but this still falls short of the 7,500ha target for 2024/25 based on earlier policy targets. Most concerning is the situation in Scotland, traditionally the engine room of UK forestry. There, levels have seen a significant reduction from 15,690ha to just 8,470ha – well below the five-year average of just over 10,500ha.
“Several factors are contributing to the downturn in Scotland. Lower timber prices and rising interest rates have weakened forestry’s economic appeal. The falling price of land suitable for afforestation has reduced the incentive for landowners to sell. At the same time, the application process for new planting schemes remains costly and uncertain, dampening confidence among would-be investors. The reduction in the Scottish government’s budget for planting grants has further discouraged investment. Even if the overall budget cap hasn’t yet been hit, the mere possibility that grant funding may not materialise has been enough to deter some investors from proceeding.
“It’s also important to note that while conifer woodlands create jobs and significant economic value, they accounted for only a third of the planted area in 2025,” added Mr Hart. “Although broadleaf species can be productive and are also vital from a biodiversity and landscape perspective, we must not overlook the essential role of conifers. Fast-growing conifers sequester carbon much faster than broadleaves and are an essential component of meeting net zero by 2050 – which is only 25 years away. If we are to meet our climate targets, we need to decarbonise construction, which includes increasing the use of home-grown timber to reduce import reliance.”
Returning to the Forest Market Review, the team at John Clegg also looked at the potential for US tariffs to upset the apple cart some way down the line.
“Timber is historically traded globally with few tariffs, with material moving easily to markets paying the best price,” said Mr Hart. “The tariffs being imposed by the US may deflect some timber to other markets, but the US cannot satisfy its demand from domestic production, so will still need to import. We think the impact on price in the UK will be limited providing a full trade war does not break out. Perhaps of more importance is the economic impact of tariffs on inflation, interest rates and investor confidence. Perhaps forestry will be seen as a safe haven in uncertain times?
“Interest rates are expected to continue to fall, and this should lead to higher forestry values all other things being equal.
“We continue to see strong interest in good properties with a number of sales concluded in Q1 this year and new funds moving into the market. Sentiment may be hardening against more remote properties with low growth rates and often dominated by pine. With timber prices relatively flat, the increasing costs of harvesting and haulage hit net returns severely and this is increasingly being reflected in price.
“In summary, we see continued steady demand for woodlands, but do not anticipate significant changes in values.”
