Timber is increasingly taking on bricks and mortar in the UK construction market. Now it’s also competing with them in the arena where they’ve always been considered safe as houses – investment. The smart money has been quietly drifting into UK forestry for a while. But today it’s attracting an ever broader range of investors looking for a solid and secure return on their cash. Some pundits say putting as “little” as £10,000 into some sort of forestry fund could now prove worthwhile, which could trigger even greater “democratisation” of the business.
Reflecting the growing interest, the financial pages have been returning to this topic with increasing regularity and this week it had one of its biggest “splashes” to date with a front page story in the Sunday Times’ money section. The British, the report acknowledged, have traditionally regarded forestry as an “exotic” investment, but it forecast that, as in the US, it could now become “mainstream”. The article, of course, highlighted the fiscal benefits of putting your money on trees, notably that, if you do, it’s exempt from inheritance tax. But the key factor driving the market now, it maintained, is the rising demand and price of timber. And it predicts, with rising consumption in the UK and around the world, the upward trends will continue.
The impact of all this for the UK timber trade remains to be seen. But it’s predicted that it may prove beneficial on two fronts. Increased and broader-based investment in forestry should drive British planting and help ensure continuity of supply – provided the growing government-favoured biofuel power sector doesn’t devour all the increase in domestic timber output (and that was a risk debated by MPs this week).
As more people get financially involved it could also reinforce the message the trade has always tried to get across: that forest products in general and timber in particular are valuable and vital commercial commodities, and that their managed exploitation underpins and enhances the more widely publicised environmental and conservation benefits of trees and woodland.
