UK Land Banking.

[Tim the Mage]

Yeah i agree with Matt. This being a skeptics forum, we will never know whether UK Land Banking is a fraud or not until you see your returns. Benefit of a doubt is pretty good in an investment where you're dealing with money(a large sum). As of now, we have seen many scam companies and not many good news about people getting returns from their investments. I guess it's perfectly alright to be a little careful and skeptical about the whole UK Land Banking.


My point stands.At the end of the day, it's your decision. If you see your returns in 10years time and you become rich, good for you. Whoever says that it's a scam will eat his/her words. Until then, we'll never know whether aliens exist.

Sorry it's a scam: 1) because the land is sold now at above its value (i.e. you can buy similar land cheaper); 2) the likely releases from the green belt between now and 2018 (that's your tens years) are known - at present around twice as much as is needed is identified so even the big landowners are playing a 50:50 punt; 3) those promoting land banking schemes know there is no prospect of the returns they promise - why sell if the 5X of 10X returns promised materialise. Doesn't make any sense; 4)you've completely misread Matt's point - I think he's saying that we should accept challenge but being skeptical about land banking falls into the same category as being skeptical about 'boiler rooms' (or possibly the flatness of the earth).

As I said, land banking is a scam, a rip-off and should be avoided. Sadly, it's just about legal in a few cases.

[Matt]

The problem is misrepresentation.

Lets say that I sold you a lottery ticket for two pounds. That's double it's intrinsic value but I add value by claiming that I can influence the result and make it five times as likely to win.

Now if I really can influence the result that's not a scam. If I just laugh at the mug who paid double price for a ticket then it is a scam.

Even if one of my victims actually wins some money with a ticket I sold him it's still a scam because they still paid twice as much as they should have done for their ticket on the basis of a lie.

In land banking, so far as the people here have explained people buy a parcel of land at more than it's intrinsic value that has a small chance of multiplying in worth if planning permision is obtained. They do so on the basis that someone is claiming that they can influence this chance.

Now if they really do influence this chance then that's not a scam. If they just laugh at the mug who paid over the odds for the land parcel then it is a scam.

Even if one of the victims actually profits from such a deal then it's still a scam because they paid over the odds for the land parcel on the basis of a lie.

What we need to see in order the validate this hypothetical non-scam land banking scheme is someone who truly adds value to the parcel of land by effective lobbying to get planning application to develop this property.

Non-one's going to eat their words if someone does profit from a land banking deal unless the reason they profited is because the person who sold them the land followed through on their promises.

[MischiefMonkey]

Yeah i agree with Matt. This being a skeptics forum, we will never know whether UK Land Banking is a fraud or not until you see your returns.
Benefit of a doubt is pretty good in an investment where you're dealing with money(a large sum). As of now, we have seen many scam companies and not many good news about people getting returns from their investments. I guess it's perfectly alright to be a little careful and skeptical about the whole UK Land Banking.

My bold - I'm not sure if I understand you right?

I would never give the 'benefit of the doubt' when it came to a large investment - nor even a small one. I would want to know everything I could about the investment, not taking one persons word and certainly not giving the 'benefit of the doubt'. Otherwise I'd be 'investing' in pyramid schemes, buying magic beans and taking those emails from the head of the Nigerian Bank seriously.

My point stands.At the end of the day, it's your decision. If you see your returns in 10years time and you become rich, good for you. Whoever says that it's a scam will eat his/her words. Until then, we'll never know whether aliens exist.

So when land banking gives a return, we'll have proof of the existence of aliens? Will Atlantis rise from the depths also?

Sorry, shouldn't laugh.

It isn't a case having to eat my words. If an investor makes money in ten years - good for him. But it is amazingly unlikely and not the intention of the LandBankers. Their intention is a short term gain fleecing the gulliable and those who don't do their homework. They aren't selling an investment. They are selling a worthless patch of dirt in order to line their own pockets.

Still would like to hear the definition of 'the real deal' and how this is different to the scam.

ETA: Like Matt's analogy - much clearer

[Legaleagle]

Yeah i agree with Matt. This being a skeptics forum, we will never know whether UK Land Banking is a fraud or not until you see your returns. Benefit of a doubt is pretty good in an investment where you're dealing with money(a large sum). As of now, we have seen many scam companies and not many good news about people getting returns from their investments. I guess it's perfectly alright to be a little careful and skeptical about the whole UK Land Banking.


My point stands.At the end of the day, it's your decision. If you see your returns in 10years time and you become rich, good for you. Whoever says that it's a scam will eat his/her words. Until then, we'll never know whether aliens exist.

We all know that if these schemes had any prospect of returns the big boys of the City, the pension funds, the investment banks, the big building firms etc. would have snapped them up. Why is it that no professional investor will touch them? Why are the buyers typically private small investors and foreigners?

The reason to my mind is the information available. The big city boys will have done their research and realised that something doesn't smell right. The inexperienced private individual will not, and is more than likley influenced by the glossing over by salesmen of the flaws in the scheme (I consider your above comments to offer a masterclass in this btw).

I can just picture you sitting in some little old ladies drawing room, giving her the old "Whoever says its a scam will eat their words. Until then, we'll never know whether aliens exist" routine just before she signs a fat cheque for your landbanking chums in the Cayman Islands. Pleasant.

[caroLive]

I must agree that what has been laid on the table is worth taking note of and makes much sense. Matt brought out a great deal of argument that should be taken into account.

I've made some checks with people i know who research on lands that they are interested to invest in. And i am still waiting for some of their answers to the questions that i myself face in this issue with regards to landbanking. And so to giving an example, i am still in the process of inquiring from people who might know better than me (due to them being more inquisitive). Granted, the planning permission might take a long time and it might be said that the landbanking companies cannot change the chance of the planning permission being granted, if i am not mistaken (which i have to go and double check again), there are websites that will show some of the government's plans to increase land space by granting land permission. So i would propose that the landbankers do not directly increase the chance of PP being granted, they do, however, "ride on the wave" of the government's plans.

This is what i can see of LB as of now. And with such a "worldwide-gloom", it's really hard to say much because anything might change at any moment. And probably, what i say or have to offer now, might not necessarily hold tomorrow. (this is a fear that i do have)

[Tim the Mage]

I Granted, the planning permission might take a long time and it might be said that the landbanking companies cannot change the chance of the planning permission being granted, if i am not mistaken (which i have to go and double check again), there are websites that will show some of the government's plans to increase land space by granting land permission. So i would propose that the landbankers do not directly increase the chance of PP being granted, they do, however, "ride on the wave" of the government's plans.

No, no, no, no, no!

No -planning permission takes the time it takes; councils are expected to conclude within 8 weeks (12 weeks for major apps). Appeals are targeted to conclude within three months - unless dealt with at public enquiry.

No - spatial plans identify preferred land usages, they are not grants of planning permission.

No - the extensions are carefully determined on the basis of deliverability which would rule out land banking even were any of these schemes (which they are not) in areas released from the green belt

No - land bankers misinform about the possiblity of permission (there is no possibility)

No - worldwide gloom doesn't change anything in terms of spatial planning allocations (although it will slow down development making the already non-existant changce of land-banking schemes being developed even smaller)

No - land banking is deceptive and exploitative. What I say now - land banking is a scam holds true today, tomorrow and in ten years from now.

[theInvestor]

No - land banking is deceptive and exploitative. What I say now - land banking is a scam holds true today, tomorrow and in ten years from now.

Correct me if i'm wrong, but i have friends who have made profits from Landbanking. Be it in Canadian Land or UK Land whatsoever, so by saying landbanking a scam seems to be like " the fox and the grapes " no?
So lets say i buy a land for a certain some of money, but i've made 3times what i've put in from the returns. The company who sold me the land would have probably make a higher profit because of the price that they sold me i agree with that. So when the company makes a profit from what they sold me, it's a scam unless the company sells me at the original value.

one more question to clarify the doubt. with the increasing population in the country, how will the goverment deal with it without developing the greenbelt? ( granted that we want to save the greenbelt )

[Matt]

Correct me if i'm wrong, but i have friends who have made profits from Landbanking.

OK. You're wrong. Why? For all the reasons I've already stated.

Be it in Canadian Land or UK Land whatsoever, so by saying landbanking a scam seems to be like " the fox and the grapes " no?

Not at all. I also know people who have profitted through property deals. Some bought property, added value themselves and sold it at a profit. Some entered into a consortium where their investment was managed by a third party. That third party added value using the investment as capital and the property increased in value. Some even bought property just as a place to live and were simply lucky to see it increase in value.

Good on them I say. No sour grapes.

So lets say i buy a land for a certain some of money, but i've made 3times what i've put in from the returns. The company who sold me the land would have probably make a higher profit because of the price that they sold me i agree with that. So when the company makes a profit from what they sold me, it's a scam unless the company sells me at the original value.

Nope that's not what I said. I said that it's a scam unless the company actually does something to warrant the increased price they're asking for the land.

If they sell it on the basis that they'll be lobbying for development, and applying for planning permission in a manner reasonably expected to be effective then it's not a scam. Even if the punters are lucky then it's still a scam if that luck had nothing to do with the company selling the scheme.

one more question to clarify the doubt. with the increasing population in the country, how will the goverment deal with it without developing the greenbelt? ( granted that we want to save the greenbelt )

Brownfield sites, high rises and development on other non-greenbelt land. Or limit imigration - the major source of UK population growth.

http://www.statistics.gov.uk/cci/nugget.asp?id=760

Oh and I don't doubt that you've friends who've profited through land banking schemes. After all your behaviour is not inconsistent with someone representing the interests of the people selling these dodgy investments. I'm sure all the p[eople sellign these investments profit hugely from them. If they've been scamming people long enought thne they might even know of a parcel of land that they sold which did come good through sheer luck if not for any effrot they made on the investors behalf.

However that still doesn't mean these investments aren't scams.

[Tim the Mage]

one more question to clarify the doubt. with the increasing population in the country, how will the goverment deal with it without developing the greenbelt? ( granted that we want to save the greenbelt )

Repeating the provisions of our planning system - currently there is a requirement that two-thirds of housing is built on re-used land. of the remaining third, nearly all the land is already identified or in the process of designation. Moreover, there are significant releases of greenfield land, not in the green belt.

Moreover, the current predictions are wrong (I am confident in saying this becuase every past prediction has been wrong). Key changes: lower levels of immigration, changes to the non-immigration rate of household formation, reuse of currently underused housing and a renewal of traditional dense urban housing types (back-to-backs anyone?).

It is theoretically possible to make miney from land-banking but only through the compounding of the scam.

[ChrisCuba]

theInvestor and CarolLive.

You miss the fundamental issue with UK plot based land banking. This isn't covered in the small print either. Your investment is not in land!

The land plot is normally marked up by at least 10 to 20 times when you buy it. In a current verifiable case London land was purchased at 500 pounds a plot 2 years ago at the peak of the UK property market and is being sold today at 10000 pounds a plot. The land has no real value unless it gets planning permission because it would cost you more than 500 pounds in fees to liquidate the plot assuming you could find someone to buy it. Yes I know you've heard about resale plots going for more but like the timeshare market that's to keep people hooked in. UK Land is currently dropping in price. When the recovery takes place you wont gain more than a few percent per year on that 500 pounds. Just to be clear it is cheap land because its green belt and nobody seriously believes it can get planning permission. It is possible but the chances are very low.

You are buying land futures. You buy into a proposal that a company will get a local authority and a developer to a point where your plot of land will be worth something. The investment you make is in a planning service. It is the quality of the service you should examine.

To get your money back and profit at least four things have to happen.
1: The company has to continue to exist.
2: The company has to diligently process the site to successful planning permission.
3: The site has to be sold at a price profitable to you including deduction of any fees.
4: You have to get paid.

If you research in the UK you can find countless cases of Land Banking companies that have failed at point one on this list.

Why ?
While the land is selling it is all profit. You pay the full price upfront everyone is happy. Nobody runs away when they are making a profit and investors are happy. Once the site is sold out it is all costs, planning expense and maintenance. Does your land banking company have a plan for unlimited multi-year expense to process planning permission ?

Most UK land banking companies have a lifespan of less than 3 years - rarely exceeding 5 years because investors start asking serious questions with their lawyers or the authorities at around 3 years. Unhappy customers and no profits.

When a company fails thousand of people are left with plots they cant sell. So the most likely outcome in 10 years is that the company that sold you the plot and promised to get you planning permission will not exist. Someone new may step in and ask you for even more money to pull all the worried plot holders together and sell the land. Based on the companies that have failed in the UK that "spend lose" cycle will continue until you run out of money or give up.

In estimated risk terms you have perhaps 1/75 chance of green belt land getting planning permission and 1/50 chance of the company still existing giving a product of something like a 00.027% (1 in 3750) chance of any return over 10 years unless you can resell your plot before the company fails. I'm happy to have those numbers disputed but i don't think they are unrealistic. This is not an investment it is a high risk gamble.

Note: If you want to check the original purchase price of the land you are being offered you can do so by paying a small fee to the UK land registry.

[Tim the Mage]

In estimated risk terms you have perhaps 1/75 chance of green belt land getting planning permission and 1/50 chance of the company still existing giving a product of something like a 00.027% (1 in 3750) chance of any return over 10 years unless you can resell your plot before the company fails. I'm happy to have those numbers disputed but i don't think they are unrealistic. This is not an investment it is a high risk gamble.

Don't think the risk is stated high enough - most of the sites identified are (at best) on the extremes of likely shift from green belt/agricultural use to developable land - I would reckon 1/500 is a better estimate in most cases. I also can't find an example of any land banking scheme that has delivered on the initial gamble (I may be wrong). I suspect that many on the companies 'anticipate' non-completion so your 1/50 estimate for continuation is too low too - I would set the product at somewehere between 1/100,000 and 1/250,000. In effect no prospect at all.

The real downside however is that you are unable -in most circumstances - to realise any of your money. The loss is, in effect, 100%.

[ChrisCuba]

I agree with you. My first version had much higher numbers. I was trying to be conservative by using numbers I could easily defend if called on them.

When it comes to plot based land banking there seem to be only two kinds of company.

Those that have failed,run away, closed down or cant be contacted.
Those that have not sold all their land plots yet.

[maxim]

I am from Singapore.

I am both a timeshare owner and land investor. I was checking for timeshares news and was intrigued by this site.

I own timeshare memberships, 2 memberships to be exact, and I am still very happy with them and RCI. I also own investments in both canadian and UK land.

I agree that I have come across some very dodgy companies that sells timeshares and resale timeshares, but I have never come across dodgy companies that sells land investments in Singapore. Thank God that I live in Singapore, where doing checks are what we are used to when doing any forms of investments.

I would just like to state my own points in this site to share my views. There is no need to be personal in this site, may I state, which is already happening here. Everyone is entitled to their opinions and views on all things in the world.

I have stayed in UK for 12 years before returning to Singapore 2 years ago.

1. Seems to me that most of the contriutors here are very much against UK Land investments.
2. Most statements made by the contributors in this site are not objective.
3. There are bogus companies in land investments, you just gotta find the right ones to invest with, not in.
4. The procedures that lead to a piece of brown field, green field or greenbelt land gaining re-zoned and achieving planning permissions as stated in here, are all true and can be verified by relevant authorities.
5. Buy land in designated housing targeted areas, engage an experienced planner work on the housing plan and apply for planning permission, then selling the re-zoned land to a developer at a high price, this is all true and can be verified by a simple email to the local council authorities. I have done that.
6. It is wrong that a comment has been made, that "no land has ever gotten planning permission in the whole history!" May I ask then, how can houses be built without permission and without registration?
7. Things to note when investing in UK Land:
   
   • Check that the land is located in areas where it is designated as a probable place for housing developments by the local borough council.
   • Check the current properties' prices and estimate the land cost.
   • check the cost of this land and compare to the initial price you pay for the current investment.
   • I have done all that by myself, and I know that I can rest be assured that it is a good POTENTIAL investment that I have.
8. I am lucky that I have done my checks before chancing upon this site, I would think that I would have been greatly misled and probably will not even think of checking with relevant authorities. I'm glad it happen this way.

Once again, let's be objective and responsible in our views.

Thank you.

[Legaleagle]

I am from Singapore.

I am both a timeshare owner and land investor. I was checking for timeshares news and was intrigued by this site.

I own timeshare memberships, 2 memberships to be exact, and I am still very happy with them and RCI. I also own investments in both canadian and UK land.

I agree that I have come across some very dodgy companies that sells timeshares and resale timeshares, but I have never come across dodgy companies that sells land investments in Singapore. Thank God that I live in Singapore, where doing checks are what we are used to when doing any forms of investments.

I would just like to state my own points in this site to share my views. There is no need to be personal in this site, may I state, which is already happening here. Everyone is entitled to their opinions and views on all things in the world.

I have stayed in UK for 12 years before returning to Singapore 2 years ago.

1. Seems to me that most of the contriutors here are very much against UK Land investments.
2. Most statements made by the contributors in this site are not objective.
3. There are bogus companies in land investments, you just gotta find the right ones to invest with, not in.
4. The procedures that lead to a piece of brown field, green field or greenbelt land gaining re-zoned and achieving planning permissions as stated in here, are all true and can be verified by relevant authorities.
5. Buy land in designated housing targeted areas, engage an experienced planner work on the housing plan and apply for planning permission, then selling the re-zoned land to a developer at a high price, this is all true and can be verified by a simple email to the local council authorities. I have done that.
6. It is wrong that a comment has been made, that "no land has ever gotten planning permission in the whole history!" May I ask then, how can houses be built without permission and without registration?
7. Things to note when investing in UK Land:
   
   • Check that the land is located in areas where it is designated as a probable place for housing developments by the local borough council.
   • Check the current properties' prices and estimate the land cost.
   • check the cost of this land and compare to the initial price you pay for the current investment.
   • I have done all that by myself, and I know that I can rest be assured that it is a good POTENTIAL investment that I have.
8. I am lucky that I have done my checks before chancing upon this site, I would think that I would have been greatly misled and probably will not even think of checking with relevant authorities. I'm glad it happen this way.

Once again, let's be objective and responsible in our views.

Thank you.

Hi Maxim, and welcome to the site.

I am afraid you seem to have missed the point of this thread. What is being discussed is a scam know as "Land Banking", not investment in UK land as a general proposition, just Land Banking. Can I suggest that you check out "Land Banking" on wikipedia or try the propertyscam.org.uk website, and hopefully these will help you understand what is being discussed.

[caroLive]

To Legaleagle.

I believe if i never interpret Maxim's note wrongly, he/she states that he/she invests in BOTH Canadian and UK Land. However, since there seems to be much resistance against Land investment (particularly in the UK), the reply was specific to that.

I am just curious to find out some things, Maxim. You claimed to have done your thorough checks before you chanced upon this website. Could you elaborate more on it since the other comments were also posted by people who claimed to have done theirs too, or at least, are perceived by me to have done theirs.

Appreciate it a lot. Thanks!