Over the past decade, the UK forestry market has demonstrated strong performance and attracted increasing levels of investment. A growing number of new investors are entering the market, driven by rising global demand for timber as a key component of sustainable construction.
Despite subdued timber prices over the past year, the long-term fundamentals for the sector remain strong. Demand for timber in the UK continues to rise, driven by the government’s commitment to achieving net zero emissions by 2050. With approximately 80% of timber currently imported, increasing the supply of domestically grown timber presents a valuable opportunity to reduce the industry’s carbon footprint. This trend points to substantial growth potential over the next five years and beyond.
Timber prices have seen substantial growth over the past decade, with forecasts suggesting continued upward momentum. This supports expectations of increasing returns on investment. While recent changes to Inheritance Tax (IHT) legislation have yet to cause any material impact on the market, we anticipate that values will continue to be driven by the strong underlying fundamentals. Consequently, forestry remains a compelling investment opportunity, particularly for those seeking to benefit from IHT relief.