Forest ownership has traditionally been perceived as straightforward, long-term and a low-risk investment. But over and above this, research by Savills published last March found that although cash on deposit would have accumulated 19% in value before tax since 2009, a spruce tree growing on a hill in southern Scotland would have accumulated 36% tax-free, simply from its growth. Add in inflation in capital market value, and the increase totals more than 80%.
The future for productive timber woodland thus looks encouraging. Together with the current Agriculture Bill's promised payments for managing land use to ensure public goods such as habitats, species, public access and water quality after Brexit, the way we value our woodland as productive will need to be recalibrated. It might soon be valued as much for its timber potential as for its ability to prevent flooding or provide other services.
The Department for Environment, Food & Rural Affairs' 25-year environment plan estimates the value of woodland's natural capital is ten times that of timber production. After Brexit, we might well see payments for services such as flood attenuation, biodiversity and health and well-being as well as carbon credits.
Woodland that is well managed, which means that those responsible are building in resilience to climate change through innovative planting and management techniques, will benefit the most. In England, only 59% of woodland is currently managed, and in Wales around 57%. That falls well short of the government's own target of 67%. Some experts believe that in certain regions, up to 75% could be managed.
Bringing existing woodland back into management can achieve near-instant benefits from better capital values, annual income and woodland health and resilience to resist pests and pathogens. There are an estimated 100m tonnes of trees in England that have reached or are over harvestable age, most of these hardwood, having a combined timber value of around £3bn. These undermanaged woodlands are a missed opportunity for today's landowners.
Forests and woodland offer public goods by the truckload. They sequester carbon improve air and water quality reduce flooding provide numerous valuable habitats improve our landscapes and represent unique places for recreation and quiet enjoyment. The protests in 2011 at the decision to sell off the Forestry Commission also proved the public's passion for our trees and forests.
The Institute of Chartered Foresters, RICS and Mersey Forest are organising a conference on the Northern Forest (see Land Journal October/November 2018, pp.22–3) at Tatton Hall near Manchester on 21 January, after a successful event in Oxford in 2018. It will highlight opportunities and challenge traditional thinking on an often undervalued asset class. To book, visit charteredforesters.org.
John Lockhart is chair of Lockhart Garratt, an independent forestry and environmental planning consultancy firstname.lastname@example.org
Simon Lloyd is chief executive of the Royal Forestry Society email@example.com
Related competencies include: Forestry and woodland management, Sustainability