Scots forest sales soar as timber prices hit record levels

In 2015, forests with a combine value of more than £21 million were up for sale with landowners looking to cash in on what was then a booming market.

Now there are 47 forests up for grabs around Scotland priced at over £35 million pounds. Eight forests are on the market at over £1 million.

The priciest forest is at the head of Loch Fyne, on the west coast of Argyll and Bute, which has just come onto the market for offers over £8 million.

Sellers say Dunderave Forest offers a "diverse range of timber crops" spread across over 3000 acres with what they called "significant potential for timber revenue".

Selling agent Fenning Welstead, in John Clegg & Co’s Edinburgh office said: “This forest investment will not only provide a good return from tax free income from timber sales, but also capital appreciation. It is an unusual offering – forests of this size do not come to the market very often – and I expect it to attract significant interest.”

The main driver of the upsurge is new wood-burning - or biomass - power stations south of the Border, which has sent demand for timber rocketing.

READ MORE: Watch: Own your own Scots forest...for £8.5m

Meanwhile the price of timber in the UK timber has reached record highs, with logs selling at up to £80 a tonne. In the last two years prices have nearly doubled.

Some forests are selling the kind of timber currently in short supply at 50 per cent above the guide price, at £16,000 per hectare.

The timber industry organisation Confor says the UK timber market has reached record highs, with logs selling at up to £80 a tonne delivered.

Forestry is a £1 billion a year industry in Scotland, employing more than 25,000 people. In terms of value to the economy, it is said to be more than twice the size of fishing.

But there remains concerns about the shortage of supply of wood as the UK already imports 80 per cent of the timber it uses, second in the world only to China in terms of net imports.

The shortage of wood has been exacerbated by a bad winter.

Stuart Goodall, chief executive of Confor said it was essential that a recent rise in productive tree planting in Scotland continued - and picked up pace.

READ MORE:Sawmilling group BSW Timber makes loss in tough market

"Timber prices are at a modern-day high, reflecting very strong demand from the wood processing sector and the limited availability of timber – a classic supply and demand situation.

"The wood processing industry needs confidence in long-term supply; that's how it makes investment decisions.

"There has been a real effort to make the planting of productive modern forests more straightforward, but we need to do more.

"So if you have some land suitable for planting trees, now is a great time to plant them as it is an asset almost certainly set to grow."

Scottish wood processors – including Norbord in Inverness, James Jones at Lockerbie, BSW at Fort William and ­Glennon Brothers in East Lothian – have made major investments to reflect the growing demand for timber for a range of products, including timber frames for housing.

Earlier this week a new manufacturing line has been officially opened at the Norbord wood panels factory near Inverness as apart of a £95 million investment assisted by a £12 million development grant from Highlands and Islands Enterprise.

That's twice the amount wood processors have been investing every year over the last decade or more in one project.

Mr Goodall added: This investment in some of the most advanced wood processing facilities in the world creates a hunger for timber - and there is just not enough timber available, especially as more wood is being used to create renewable energy. "

"This demand for timber has pushed up prices and in turn, is helping to drive up prices for forests. This is a great time for anyone who has woodland to consider whether they should be selling the timber, or having their woodland valued."

The hunger for wood has led to a rise in illegal logging, where timber is harvested, transported, processed, bought or sold in violation of national or sub-national laws.

Illegal timber is estimated to account for 50 to 90 percent of wood harvested from Amazonia, central Africa and Southeast Asia. Interpol estimates that 40 to 60 percent of timber exports from Indonesia, 25 percent from Russia and 70 percent from Gabon are illegal.

In 2016 the US Trade Representative’s Office estimated that 90 percent of US timber imports from Peru were sourced from illegal logging.

Stuart Goodall, chief executive of Confor on the current state of the forestry and wood-using business

PEOPLE love forests and woodland. The Forestry Commission's public opinion study for 2017 showed 88 per cent agreed that ‘a lot more trees should be planted’.

As chief executive of the forestry and wood processing trade body, you would expect me to agree - and I do. We need to plant lots more trees, for many reasons - the latest of which is highlighted by The Herald today. Quite simply, we are experiencing record demand for timber.

If we are to maintain and build on a world-leading, low-carbon Scottish industry then we must assure our wood processors about future supplies. Strong supplies in the recent past have created confidence and wood processors like Norbord in Inverness, James Jones at Lockerbie, BSW at Fort William and ­Glennon Brothers in East Lothian have invested hundreds of millions of pounds in some of the world's most modern wood processing facilities.

This investment has helped Scotland's forestry and wood processing sector grow into an industry worth £1 billion annually (twice the economic contribution of fishing), employing well over 25,000 people.  If future supplies are not assured, that confidence will not last forever - ultimately threatening future investment and jobs.

Those wood processing jobs are a crucial component of Scotland's rural economy and the wood these businesses produce is all around us every day - in the timber frames of our homes, our kitchen and bathroom units, flooring, fencing, decking, furniture and much more.

However, few of us think where that wood comes from in the first place.

Some of it comes from local forests (and more of it should) but across the UK, we import a staggering 80 per cent of the wood we use. We are second only to China in terms of our net imports of timber. This is partly because not enough of our land is forested (18 per cent in Scotland, around half of the European average).

We need to plant more trees and we need to manage more of the woodland we have, for example on farms. Wood is the ultimate sustainable material - and as well as producing timber, the process of growing a tree delivers multiple social and environmental benefits. It soaks up carbon (which is then stored in wood products), helps reduce flood risks, encourages biodiversity and offers a range of great recreational opportunities.

So we can provide all these benefits, as well as jobs and green growth at the same time. 

Planting more trees is an investment in the future, but we can also do more now.

We should encourage anyone who owns woodland to think about its value - the price being paid for forests is at a record high, but not all woodland owners realise the benefits of forests. As well as reflecting strong demand for timber, the current high prices being paid are also driven by the wider benefits of Inheritance Tax relief and the profits from selling timber being free from Capital Gains Tax

We are seeing forests growing the kind of productive timber the industry needs being sold for twice their normal value. With demand for wood incredibly strong, there’s never been a ­better time for someone with a woodland to think about its value. But let's also think about the longer-term and give the people what they - by planting lots more trees.