Only 2% of the UK is woodland, and owning a piece of it can be an attractive proposition. Not only might your children have some- where beautiful to explore, but the tax breaks mean the purchase can make financial sense, too. The head of land and property for the Woodland Trust, David Smith, says that there are two options: ‘amenity’ and ‘financial’ woodlands. Amenity woodlands are those owned in connection with a shoot or simply because a person wants to own a forest and vary from half an acre, up to 50 or even 100 acres, and minimal management allows for plenty of biodiversity to study and enjoy. You can, says Mr Smith, agree a five-year maintenance plan with the Forestry Commission, and it will, in return, provide grants as long as this plan is followed.
This is an increasingly popular way of owning woodland. According to Dr John Jackson, chief executive of the Royal Forestry Society, there is a growing number of ‘novice’ owners, who ‘like to feel that they own a piece of the English countryside’, and have chosen woodland as it is somewhere to take the family and pass on over the generations. Financial woodlands are commercial forests, which grow ‘exotic conifers’, such as the Sitka spruce, in neat, planned rows, with little biodiversity or exploration opportunities for the children. People choose this option, says Mr Smith, because, once you have owned the woodland for two years, not only does it become exempt from inheritance tax, but the rise in the value of the trees is free from capital gains tax. However, it only qualifies as commercial woodland if timber from the forest is actively managed, marketed and sold on a commercial basis.
According to Mr Smith, ‘the returns aren’t great’. Timber prices peaked in 1995 and declined steadily for the following few years, mainly due to the influx of soft wood from Eastern Europe. The figures are still 51% below the 1995 peak, although demand from China is now driving prices up again, and, according to forestry agents Forestry Investment Management, timber prices have risen 11% in the past six months.
There are several ways to make a purchase. You can invest upwards of about £25,000 to own a share of a forest, or you can buy a whole forest yourself. Prices, says Mr Smith, vary greatly. The South-East commands up to £3,000 per acre, whereas woodland can change hands in Scotland for £500 per acre. Dr Jackson also cites high demand in the South-East as an explanation for high prices there, and adds that having good-quality timber, or a pond, will also increase the value of the woodland.
Oxfordshire-based John Clegg & Co was established in 1967, and is the UK’s leading forestry agent, trading about 100 woodlands each year. Some of the woodlands it is currently selling includes Dilty Moss in Angus, Scotland (44.72 acres for £90,000); and Chase Wood in Kent (109.5 acres for £300,000). Woodlands.co.uk, based in London, is a smaller, family-run forestry agent, and says: ‘It’s surprisingly straightforward to buy a woodland. Unlike with residential property, there are no buying chains, furniture or leases and usually no legal charges to register or release.’ It is currently offering the seven-acre Sampson Wood near Godalming, Surrey, for £55,000; the seven-acre Dingle Wood in Gloucestershire for £39,000; and the 12.5-acre Sarrock Wood in Pinwherry, South Ayrshire, at £39,000.
Once you’ve bought your woodland, Forestry Investment Management, UPM Tilhill and Fountains are organisations that will, for a fee, manage and market your woodland and timber, as well as offering a variety of services, including digital mapping, ecological surveys, and insurance against fire and disease. You can also get advice from the Small Woods Association, which is Britain’s leading organisation in supporting the owners and carers of small woodlands, providing information packs about starting businesses in woodlands and running workshops and courses on ownership.
A spokesman for the Forestry Commission says that the main thing to remember is to obtain a felling licence before you fell any trees. The exception is if you are felling no more than five cubic metres of timber per year for personal use. Failure to comply with this rule can result in a fine of up to £2,500, or twice the value of the felled trees (whichever is greater). You must also replant felled trees or face another fine.
WHERE WOULD BE BEST FOR ADVICE?
? Woodland Trust 01476 581135; www.woodland-trust.org.uk
? Forestry Commission 01223 314546; www.forestry.gov.uk
? Royal Forestry Society 01442 822028; www.rfs.org.uk
? Small Woods Association 01952 432769; www.smallwoods.org.uk
? John Clegg & Co 01844 215800; www.johnclegg.co.uk
? Woodlands.co.uk 020?7737 0070; www.woodlands.co.uk
? Forestry Investment Management 01451 844655; www.fimltd.co.uk
? UPM Tilhill 01786 435000; www.upm-tilhill.com
? Fountains Forestry 01295 750000; www.fountainswoodlands.com
