Land development scams

[brian]

Here's an eye-opening piece from the BBC about a possible land development scam:

http://news.bbc.co.uk/1/hi/england/5348290.stm

In short, some companies are buying land then reselling them to investors on the premise that they will make a killing once the land is bought up for development - without actually letting the would-be investors know that the chances of that land being sought for development are slim at best.

[vicki2]

Just goes to show us that doing one's homework pays off ...you can't believe what estate agent or developers say so many times. Like the estate agent who says no one is likely to build any where near you when they know full right well that one is in the planning stages.

[palefrost]

LOL true story. Real Estate agents are no better then used car dealers with a potental bigger payout. They say they are working for you but its always themselves that come first.

[brian]

Makes me feel like buying up land and reselling it now...

[acernetx]

I have a client who is trying to sell 15 acres of agricutural land between the M25 and M40. He has been offered well over the agricultural rates of £3500 per acre (£5000+) but because a company has offered to help him sell by dividing his land into "potential house plots" and charging £10,000 per plot! He is under the illusion that he can make £100,000 per acre = £1.5 million for the whole 15 acres.

Problem is that the average person (forking out £10k) is being misled into thinking that someday, they will eventually manage to get planning permission...

Also... The land owner is thinking his land is worth much more than it actually is.

[tickeverybox]

This scam is well established and still advertised in national media.

The company trying to lure you into investing sell the land on the future potential gains - current value £3,000 per acre, but with planning permission in 10 yrs time £300,000 per acre (present value).

This will very rarely work as the Local Authority's will never allocate some areas for housing and will therefore never achieve its potential value.

Put your money somewhere safer if you don't need it for the next 10 years.

[vicki2]

The whole planning permission aspect of raw land is pretty dicey. It gets weirder all the time with environmental issues and abuttment on forests, rivers, etc. What used to look like a great house site might be darned near impossible to ever put anything on but a tent!

[juol7]

Like I've heard over and over before, you should always research on the things you're planning to spend your money on.

[sandeep247]

Any bought land from either UKLI or Grosvenor Land Brokerage. I bought a piece of plot from each at a cost of £10,000. Just wanted to know if I should be worried?

The first plot is in Finchampstead and the other in Raunds (Northamptonshire)

I paid via a credit card.

Thanks

[brian]

I'm afraid I couldn't advise on your specifics - but I'm presuming that you researched all of your investment options, researched the land development market, and decided that indeed these specific plots you bought offered good long-term returns?

Or did you just speak to a salesperson, who advised it was a great deal, so you bought it without looking into it independently?