Woodland valuation advice

[ChrisD]

I'm new here so apologies if this topic has been raised before. I did search the forum for likely threads but I couldn't really find anything...

I'm in the fortunate situation of having a house that's bordered on two sides by plantation. Even better, the owner is willing to release a small amount - just under an acre. The problem I have is negotiating a price that we're both happy with. I've just calculated the average price per acre for all the woodlands advertised for sale in central southern England, and it comes out at just under £10k. However, the owner wants to relate the sale price to any potential increase in the value of my property. My last offer was equivalent to more that £30k per acre! Much as I love the woods, common sense (aka my wife) has to prevail somewhere!

I recognise we're in a unique situation in that there isn't really a market here, as potentially I'm the only buyer.

Can anyone offer any thoughts, advice, opinion? Having stumbled upon this forum, the more I read about what woodland owners get up to, the more I want those woods!

[greyman]

Hello ChrisD,

Welcome to the SWOG Forum.

Well, I can't speak for others - they may feel different but 30K for around an acre of plantation (you don't say what type) seems an awful lot - you will need to want it real bad. Having said that if you have the money, the inclination and the desire (and you don't have to sell the family to get it) I guess only you can make the decision.

Sorry not much help from me on this - we're just in the middle of buying another plot next to our existing acrage and I'm not paying anything like that. Just under an acre doesn't give you too much to do anything with but if it gives you a buffer around your home and garden and you and yours derive pleasure and comfort from it - it just comes down to what you think it is worth to you.

Keep us up to date. Good Luck!

Greyman

[MartinD]

Chris

I'm in Cheshire, and I paid a total of £27k, including all solicitors fees (mine and the sellers), for 5 acres of ASNW adjoining the house about 3 years ago. £30k does sound very expensive for one acre. (Have you discussed fees? He may expect you to pay his, as you have approached him - that was the deal on mine)

In valuation terms, we had our house valued in conjunction with the woodland, and we got a mixed bag of responses from valuers. The one who seemed to have a better feel for the 'with paddock' market suggested that if a potential buyer wanted the woodland, it might add around £50k to the house - but that some buyers would not want the woodland, and it might then prove a hindrance in selling. He suggested that we ensure that we had separate highway access, so that the land could be sold off separately if required. (Believe it or not, there are people who do not like woodland - they think it is dark and forbidding, or a security risk - really!) Although our house is in the development zone, the woodland is in green belt, so we cannot treat it as part of the garden, and certainly could never build on it - which means that its value is limited, relative to the house. Conversely, as plantation, your woodland might have a value as standing timber which can be harvested at some stage, either totally or by thinning. If you do not intend to harvest it, you are perhaps paying a premium for something you are not going to benefit from. I assume that as plantation, its current value as a crop will not be worth anything like £30k.

Before you agree to buy one acre, check with the Forestry Commission whether grants are available for your type of woodland, and if so, do you need a minimum landholding to qualify - perhaps you should try for more.

Martin

[RichardKing]

Have you asked an estate agent what would be be increased value of your property including the proposed woodland purchase ?

[John H]

If the exra land is going to add 30k to the value of your house then it sounds a bargain.

A few years ago we paid 36k for about an acre as we felt it was a potential building plot and if built on would have destroyed our privacy. There was overage clause in the sale giving the seller 50% of any increase in value due to gaining planning permission.

[ChrisD]

Thanks for all the feedback and thoughts - really useful. I'll try to answer some of the questions you've raised:

The land adjacent to my house is partly Ash and partly Sitka Spruce. The land was harvested about 12 years ago I think, and replanted soon after. There's a lot of self-seeded birch and other scrub that has done better than the planted trees. Some of the Ash trees are probably around 20ft. I understand that the crop cycle is usually about 20 years. I have no idea of the current or potential future value of the trees. I assume though that the money I'm offering would be a far better commercial return than anything they could realise through sale of the timber?

I have offered to pay the vendor's fees.

We have sought advice from various agents and as in Martin's experience above, their opinions have been mixed. Some have said there's a potential £25k - £50k increase in value of the property while other have pointed out that having the extra land could put some buyers off. Our current garden is about half an acre so we're not desperate for space.

I didn't know about the possibility of grants so that's something I'll research - thanks for the advice.

I'd be happy with overage clauses if they were reasonable. I don't expect that anyone would ever get planning permission and that's not why we're interested in buying it.

So, a bit like the opinions offered above, part of me thinks its a heck of a lot of money, and part of me thinks it's reasonable! My problem is that I think the vendor thinks it's worth even more than I've offered. I hope that some of the info above can help me convince them otherwise.

Thanks again.

-Chris

[RichardKing]

Well ChrisD at the end of the day its your call.

The value of anything is only what somebody is prepared to pay for it.

It sounds highly unlikely that the vendor would persuade any other purchasers to pay that price.

Personally I would step back & play a waiting game.

The lure of 30 grand of easy money may well eventually snare the vendor.

[MartinD]

Chris

In terms of the Forestry Commission there are grants available for the management of woodland called 'Woodland Improvement Grants' - WIGs.

http://www.forestry.gov.uk/website/forestry.nsf/byunique/infd-74adak

They are not automatically available, but the Commission officers I have always found to be extrememly helpful, and it would be worth speaking to your local officer for advice, even if no grant is available.

Valuation - like you, we have nearly an acre of garden, so one of the agents didn't think the woodland would add materially to the value of the house, and another thought that it might if we found the right buyer - but conversely might prove a hindrance if we found someone who loved the house with its big garden, but didn't like the idea of looking after woodland. If it had been 'paddock' it would always have increased the value, as there is a big market for houses with attached land for horses - perhaps your vendor is making the assumption that any land is valuable in this respect - but there is a big difference between paddock / accommodation land and woodland.

If you can harvest the timber without restriction (apart from the standard limit of 5 cubic metres per quarter), you might also look at the grants available under the renewable heat incentive http://www.decc.gov.uk/en/content/cms/what_we_do/uk_supply/energy_mix/renewable/policy/renewable_heat/incentive/incentive.aspx

which will give a grant of approx 9p per kwh of deemed heat requirement for a period of 15 years for a log burning gasification boiler - part of the governments attempt to meet its carbon reduction targets by 2020. This might give you some payback, although one acre will not provide a lot of fuel.

[ChrisD]

There was an interesting piece in the property section of my local paper this weekend. 2.7 acres of grass paddock recently sold at auction for £55,000, equivalent to £20,200 per acre. Evidently the record this year was around £25,000 per acre. So I could be paying more for woodland than pony paddock sold at open auction.

Maybe I should just move to Cheshire...

[wrekin]

This isn't just the land though: it's having it adjacent to the house, and that would be worth a premium for many people. Furthermore, what would an acre of "garden" add to a suburban house price even with a covenant preventing building?