Why land sold for forestry in Scotland has plummeted by more than 50 per cent

The total area of Scotland’s land sold for forestry plummeted by more than half in the past year, a report have revealed.

The Scottish Land Commission’s 2024 Rural Land Market Data Report, released this week, looks into farmland, forestry and estate transactions from 2020 to last year based on data from Registers of Scotland (RoS).

The area boasts 300ha of native woodland, one of the largest and oldest of the ‘new’ native woodlands in Scotland, including oak, birch, ash, aspen, alder, gean, hazel, holly, juniper, willow and Scots pine. | GOLDCREST Land & Forestry Group

The report showed in 2023, the total area of forestry sold shrunk by 54 per cent compared to 2022. The data showed just 0.5 per cent of Scotland’s land changed ownership in 2023, reflecting a slowdown in sales activity compared to previous years.

The reduction in transactions and the smaller areas of land sold were primarily driven by a sharp decline in forestry land sales, the report said.

Although forestry previously contributed to significant price growth, especially in the south-west of the country, the figures showed this trend has stabilised.

The report also highlighted a stark reduction in the overall market value of forestry sales. From a peak of £286 million in 2021, this figure plummeted to just £70m in 2023, marking a 75 per cent drop in market value over two years.

Despite this, eastern Scotland accounted for the highest number of sales and the largest overall market share during 2020–23, with a total value of £291m.

Meanwhile, south-west Scotland recorded the highest average land values, at £22,801 per hectare. The majority of forestry market value during this period was concentrated in Dumfriesshire, Roxburghshire, Argyll, and Perthshire.

Commenting on the report, James MacKessack-Leitch, policy and practice lead at the Scottish Land Commission, said: “The Rural Land Market Data Report is crucial for building a clear understanding of Scotland’s land market. Despite challenges with the data, the report reveals clear trends, such as low market activity in large-scale transactions and a cooling of the forestry land market.

“By improving the quality and transparency of market data, we can gain the insights needed to identify opportunities to create a vibrant and transparent rural land market, which is key to creating more opportunities for communities, businesses and individuals to own and benefit from Scotland’s land.”

It comes after the UK Forest Market Report 2024, published last month, revealed £95.4m of forestry was listed for sale in the UK overall - a 55 per cent fall on the previous year.

Natural capital potential in Scotland also showed up poor. Figures indicated natural capital opportunities south of the Border had increased, with England seeing a rise of 16 per cent to £14,500 per gross hectare, and Wales an increase in 7 per cent to £18,100 per gross hectare.

However, the paper showed Scotland, which continues to dominate the commercial forestry market with a 79 per cent of the market share, saw its land with natural capital potential drop 44 per cent to £3,100 per gross hectare.

Forestry leaders said this figure, however, was “distorted” by “an unusually high proportion” of northern Scotland properties, which are typically lower in value due to the distance from core timber markets, up for sale at relatively low prices over the past year.

In the past year, Scottish Forestry, the public body responsible for forestry policy, support and regulations, confirmed funding contribution to woodland planting schemes was gradually being reduced in Scotland. Large commercial schemes have already received lower rates of grant compared to smaller farmer and native schemes.