Fenning Welstead
Director, Edinburgh Forestry
Last year we re-introduced a short section which covers those woodlands which do not meet the criteria for the main report.
Generally these are woodlands of greater than 25 acres which are managed with mixed objectives; below 25 acres we believe that the prices are driven by local factors and give no wider insight into the market.
By its nature it is impossible to capture the whole of this market but we believe that our sample of 40 properties sold across the UK is broadly indicative of the market. Every property in this section is sold on its own unique characteristics, and the definition of mixed woodland is somewhat elastic.
Our sample of 40 properties includes 2,235 acres of mixed woodlands, with a total guide price of £8.44m. The total selling price was £8.57m which is 2% over the guide price, so is a sharp distinction to commercial forestry.
Average prices and acres sold are shown in Fig 4. England achieved the highest average price at £5,500/acre, with Wales at £3,800/acre and Scotland £1,600/acre.
Not surprisingly, one of the main determinants of prices is location, with proximity to London or other major centres being crucial, reflecting the amenity component in these prices. The highest prices in the year, in excess of £9,000/acre were achieved in the Home Counties, with Wales and Scotland having far more affordable properties.
We see a trend where smart owners have been able to increase the capital value of the woodlands through attention to good management. Factors such as managing public access, improving the sporting capacity, developing the external access, adding small buildings, or small scale environmental projects such as ponds or habitat improvement can add to the overall value of the property. These also allow the owner to get actively involved in the development of the woodland, which is a major objective of many investors.
With around 50% of woodland in England being considered ‘under managed’ there remains huge potential for more investors to get involved at this end of the market.
It is worth remembering that even smaller and more mixed woodlands can meet the criteria of ‘commercial management’ required to get the tax advantages from owning woodland. Please discuss with us for more information.
Case Study
Mixed woodland
It’s not all about location, location, location
In mixed woodlands, especially in southern England, one theme that seems to be growing in relevance is amenity potential.
‘Amenity’, and what that word encompasses, is a topic of much debate in attributing value, but what is clear is that distance from the M25 is not the only major factor to consider.
This year we saw the Hurtwood Lot 2, a conifer woodland located in the Surrey Hills Area of Outstanding Natural Beauty, sell for under £10,000/ha. We also saw Oakwood West, another English conifer woodland near Chichester sell for around £20,000/ha.
The difference between the two arguably could be characterised by one key attribute of amenity namely seclusion. Oakwood West enjoyed a private feel and had, as a result, developed the sporting side of the woodland.
Hurtwood on the other hand was heavily used by the public, a great benefit to the local community but with clear implications for value.
