Now is the perfect time to plant more trees, farmers told
Archant Norfolk Photographic © 2015
A raft of economic and environmental factors have combined to make planting new woodland an increasingly valuable diversification option for East Anglian farmers, said rural agents.
With new buyers continuing to enter the market, rising timber prices and clear environmental benefits, a new report by Savills says tree-planting could provide farmers and landowners with a sustainable way to boost their income.
According to the firm’s UK Forestry Spotlight, the carbon offsetting ability of trees has a “potentially large role to play in the UK’s net zero pledge”, while the economic value of woodland carbon sequestration could prove an important source of revenue in the future.
Edward Fitzalan-Howard, from the rural team at Savills Norwich, said there has also been a “perceptible shift in public attitude towards the climate emergency”, so investors are looking to forestry to help meet some of their ethical governance goals.
“For commercial forestry, the sustainability arguments are clear; we are producing a natural commodity in timber, which, if used in a sustainable way, locks up the carbon sequestered through the growth of trees,” he said.
“At the same time the growing world population will put a strain on our natural forests, so plantations will be required to deliver more of the wood we need, while certification standards ensure there is a place for biodiversity and conservation in even the most commercially managed forests, meaning they are both sustainable and environmentally beneficial.”
According to the Savills report, while interest from new buyers was a feature of last year’s market other recent trends continued including low supply, strong competition and reasonable timber prices, as well as rising asset values across all regions.
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Savills says the value of the UK forestry investment market was just over £121m during the 2019 forest year (October 1, 2018 to September 30, 2019), representing a 2pc reduction in overall sales value compared to 2018. However the average gross value increased by 17pc to £9,900 per hectare in 2019, according to the firm’s analysis of sales data.
Mr Fitzalan-Howard added: “Due to the drop off in forest planting in the 1990s, even-aged properties are now rare and restructured properties with a wide age range of mature and immature timber are now the market norm. These have different valuation dynamics as the prices combine both the immediate value realisable from felling age timber and the expectation value that younger trees have. This allows investors to take a positive approach to pricing, with an opportunity for a phased income rather than just at the point of sale.”
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