Hello Maxim
This site is not overly negative or unique. A search for land banking scams in Google will identify many reputable media, consumer and government organisations in the UK that warn against land banking. The UK land registry recently issued a warning against Land Banking apparently fed up with getting the same repeated questions.
Land Banking here refers to the purchase of an area of land without planning permission and the sub division into multiple plots. Those plots are then resold at a huge profit to "investors" via the internet, property shows, telesales and sometimes unfortunately financial advisors. In Asia you will often see these companies renting space in shopping malls or hotels at the weekend.
Land Banking scams are a variation on advanced fee fraud. You pay an upfront fee and expect that in the future you will get a much larger sum back. Unlike 419 scams where the fraud is discovered in a few weeks the land plot is used to set your expectation of investment return years into the future. The company has a long period of uncertainty about outcome to extract even more money by milking both the individual and any friends or colleagues who are introduced. Typically this is done with incremental small pieces of "good news" like Gordon Brown making announcements on building council houses. The upsell / cross sell in Land Banking is typically over 60% and similar to timeshare and boiler room scams. Most people buy after being introduced by a friend or colleague.
There are no verifiable reports on any land banking plot sites in the UK gaining planning permission. Some sites report "my friend made thousands of pounds from buying UK land banking plots" but if you ask for details on a planning application or a site there is no answer.
In the largest property bubble the UK has ever experienced 2002 - 2007 there were zero successful conversions of land banking plots sold under the above schemes. In the same period there were 100's of land banking company failures with the investors left with worthless plots.
In the only reported case where a land banking plot company made an application for planning permission in the UK the application failed. The land was also discovered to have a covenant preventing resale at a profit. Even if the planning application had been successful and the site sold, any profit would pass back to the local authority. The "planning experts" at the company had either failed to notice or ignored the covenant when they purchased the land at a very low price for use as farmland.
There is now a secondary scam of individuals offering to process planning applications for owners of plots purchased from land banking companies that have failed. There have been zero successes here either.
Dear Legaleagle,Originally Posted by Legaleagle
Thanks for pointing out the larger picture of this whole forum thread. Please do not take it personally, I just feel that you are pretty put-off by me and my comments.
I would like to point out to everyone in this forum that the words "greenbelt land" has been used many times. This term could only relate to land in UK cos I do not know of any other parts of the world that use terms like these. Therefore, I kinda relate it straight to UK land. Mind you, I didn't start this forum, I just happen to pass through this forum, and with much free time on my hands, I thought I'll chip in my knowledge and involvement.
Let us all share our views and knowledge generously without any bits of sarcasms.
Thank you.
Hi 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!
My checks done were very simple...
For my Timeshare Memberships, I already know how it works before purchasing them, therefore I can manage my expectations.
For my investment in Canadian land, I did it because the company has a track record and I was introduced to them by my own good Kakis ("friends" in malay to Singaporeans) who were part of the track record.
For my investment in UK, the invitation came out of the blue. I have a lot of good friends who are still in UK. They did the checks for me at the local Borough Council, Land Registry and The FSA (I've read propertyscam during that period). I have the title deed checked out too.
All in all, all my landbanking investments are legitimate.
I shall share with you my investment success in UK land investments very soon in this year.
Alarm bells are starting to ring now. You are from Singapore and this invitation came out of the blue to make an investment in a land scheme in the UK. All hallmarks of a Landbank scam.
Of course, without seeing the contract you signed I would have no means of knowing if you have been the victim of a scam. Are you able to tell us:
Did you buy an undeveloped piece of farmland described to you as a "building plot"?
Is the plot self-contained (i.e. does it have its own access to a public road, utilities etc.) or is it part of a larger series of plots?
What has the Local Authority told you is the current authorised use for the land?
Has planning permission for change of use to residential use been granted?
If not, have the Local Authority confirmed to you that it has been applied for?
Does your contract with the seller contain any provisions which compel them to apply for planning permission on your behalf, (please disregard any verbal assurances which you were given as they have no legal status in land sales in the UK)?
Did a solicitor check the title to the land for you and confirm that there were no legal impediments (e.g. covenants against change of use) to development?
In what jurisdiction is the seller company based, in the UK or offshore?
What is the area (size) of the land you bought and how much did you pay for it?
If you have been the victim of the scam it is probably too late to get your money back, but it is not too late to save yourself from further losses through secondary scams.
Dear Legaleagle,
Thanks for your questions. Though most of my own have gone unanswered, I'll try to satisfy yours.
Firstly, I don't understand why alarm bells are ringing in your ears. I will have these following points to share with you and all fellow netizens in this forum.
I hope, for all others who have invested in land, that you would be as fortunate as I am, to have invested with and through the right and proper company.
- The site that I have invested in, has not gain any grants of any residential planning permission, that is the reason why I am investing in the site for. If the site had already achieved any planning permission, I don't think I would have any chance of investing in it.
- Yes, I have checked with the local borough council of the usage of my site, and have been told that the site can be developed with the achievement of gaining planning permission.
- I am already in receipt of my Title Deed (Title Absolute) from the relevant Government Office and had verified it online via the Government Website (I had to pay a small fees to do my checks online via the government portal).
- My plot of land is real, as is the Title Deed, cos it's issued from the Landregistry Office, as in the same as my fellow kakis who have invested in the same location.
Thank you.
If you've read this whole thread and properly understood LE's questions, then you must be a naive investor......
.....unless you are about to now tell us the name of this right and proper company.I hope, for all others who have invested in land, that you would be as fortunate as I am, to have invested with and through the right and proper company.
Thank you.
Oh dear, oh dear! Don't think you'll be seeing your money back this side of the little devils lacing up their ice skates.
This is an actual local authority response on a Land Banking site in London.
"I can say that under current circumstances there is next to no chance of a residential development being approved on land that I know is being marketed by xxxx. The land is identified as being within the Metropolitan Green Belt in the Hounslow's Unitary Development Plan. It is also a nature conservation area. You can read the relevant UDP policies at hounslow.gov.uk I can not predict with any certainty what the situation will be in three or four years time but I am not aware of any firm indications that the development plan situation will change within this period."
The local authority wont predetermine the outcome of a planning application other than to try and give guidance as above. Otherwise there would be no point in having the planning application process. Democracy at work
I have no doubt you read the above to mean that in a few years this site will get planning permission. You will argue that since they don't say no it could be yes.
Assuming you are telling the truth and are not representing a vendor almost certainly you have bought land that wont get planning permission. They were able to buy it cheaply and sell it to you at a large profit because it wont get planning permission. Also the fact that you are being sold the land halfway around the world tells me its probably a scam but seems to tell you you have been especially selected.
Check the UK PropertyScam website which over the last couple of days has added an item on 4 land banking plots being sold on eBay. They were purchased for a total of 50,000 pounds and have just been sold for a grand total of 1220 pounds. I calculate a loss of 97%.
I am sure you believe your plots and your Land Banking vendor are different but you might want to ask yourself why you believe that.
So, people are investing in green belt land in the hope that it will be built on! Nice!
That's a big assumption. It is very possible that 'maxim' isn't a victim but is simply trying to create a bit of confusion on this thread so that someone else searching the web for info won't realise so readily that Land Banking is a scam.
Bob, forgive me for saying so, but don't you think that some of the shenanigans of correspondents cropping up on this site might just have turned you into a jaded cynic?
So lets be unequivocal.
Land banking is a scam.
If you are offered a plot of land without planning permission at over the going rate for agricultural land, it is a scam.
LeagleEagle asked some fantastic questions. Which Maxim failed to answer, despite a less than valiant attempt. If you (or the vendor of the land) can't answer the questions satisfactorily - with written evidence - then it is a scam.
If you don't understand LeagleEagle's questions, or their importance, or what constitutes 'satisfactorily' in this context, then you probably shouldn't be investing in land.
Is there some secret activity that is taking place? Hmm.. Bob, i suppose Maxim is just trying to make the entire argument more sound by providing an alternative viewpoint. hopefully, Maxim is not trying to cause any confusion to us!Bob, forgive me for saying so, but don't you think that some of the shenanigans of correspondents cropping up on this site might just have turned you into a jaded cynic?
Anyway, i seem to be getting a clearer picture of landbanking from both sides now. Thank you to all who have contributed in providing both sides of the argument.
Both sides? The two sides being the truth that it is a scam and the lie that it isn't?
...we put a poster on my Dad's office wall one - it said: "I always look at both sides of the argument, my side and the wrong side."
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