UK forestry market steadies as demand grows despite price dip

The UK’s commercial forestry market has steadied after a cautious 2025, with demand rising despite softer prices, as farmers and landowners increasingly look to forestry as a diversification option amid wider pressures on farm incomes.

Savills figures show total sales hit a record £304.4 million during the year — though the headline figure was heavily skewed by a single major transaction.

Stripping out large deals, the underlying market was worth around £150 million, broadly in line with the 10-year average and ahead of the previous two years.

Nicola Buckingham, associate director in Savills’ rural research team, said the record total masked the true picture. “During the 2025 forest year, the total value of sales was at £304.4 million, a record high for the sector. However, this was influenced by a number of large transactions, with one sale accounting for 43% of the overall value traded.”

Prices softened despite strong activity. The average price per hectare fell by 15.5 per cent to around £15,500.

This reflects both a cooling from the market peak seen in 2022 and the varied nature of properties brought forward for sale.

However, the longer-term trend remains robust, with values still around 2.5 times higher than in 2016.

In total, 18,100 hectares of forestry were traded in 2025 — well above the 10-year average of 16,000 hectares — underlining steady activity levels across the sector.

The figures highlight forestry’s growing role as a practical diversification option for farmers and landowners, offering long-term income potential alongside environmental benefits such as carbon capture and habitat creation.

Scotland continued to dominate the market, accounting for 95 per cent of all commercial forestry transactions — significantly above the long-term average.

By contrast, activity in England and Wales remained subdued. Around 500 hectares were sold in England, below the 10-year average of 900 hectares.

Wales saw just 400 hectares traded, compared with a typical annual figure of close to 1,000 hectares. However, limited sales still pointed to strengthening prices in some areas.

James Adamson, head of forestry at Savills, said demand is expected to build further. “The commercial forestry market can expect to see strengthening demand in years to come.”

He added that, despite the headline figures, market activity felt relatively subdued during the year, but investor appetite remains strong.

Mr Adamson said the sector continues to attract capital as a long-term asset, offering “timber production, environmental enhancement and carbon as part of a burgeoning green agenda”.

In short, while prices have eased from recent highs, activity remains resilient and interest in forestry as a long-term investment is continuing to grow.

With demand building and new income streams emerging, forestry is increasingly being seen as a practical option for landowners looking to secure long-term returns and environmental benefits.