With timber prices at their lowest for 20 years, now is the time to buy, according to Forestry Investment Management (FIM).
The Oxfordshire-based business has just launched its FIM Timber Growth Fund which offers investors a low risk, asset opportunity.
FIM said that returns on investments are tax-free with no liability for income tax, capital gains tax or inheritance tax. And it said target investment returns are currently around 5% per year tax-free which will improve with rising timber prices.
Colin Lees-Millais, a FIM director, said: “The current weakness in timber prices, to a level last seen in 1983, represents a buying opportunity.
“UK timber is currently undervalued in comparison to European timber, with standing timber prices in southern Sweden some two-and-a-half times the level in the UK.
“Continued weakness in sterling should encourage new investment in processing capacity by overseas producers, to the longer term benefit of timber prices, while also assisting in increasing output from existing capacity.
“The last period of significant expansion in the processing sector occurred in the late 1980s and between 1982 and1987, timber prices rose 104%. In our opinion there is limited downside on current prices but significant upside.”
