People Warned Over Land Banking Schemes
According to PropertyWire, the UK's Land Registry is warning people not to buy through land banking schemes as it is revealed that victims' losses have reached £200 million.
It has updated its guide on land banking to warn the public about the risks involved in buying land forming part of a land banking scheme. The Financial Services Authority (FSA) recently estimated that land banking schemes have cost UK investors as much as £200 million.
'We know that many investors, living both in this country and abroad, hand over thousands of pounds for land that has little or no chance of being developed.' said Jane Allen from Land Registry's Corporate Legal Services.
'Anybody considering buying land for its investment potential should read our guide. By publishing this updated version, we aim to improve public awareness of the risks of investing in land banking scheme. However, individuals should not assume that we think any particular scheme is a poor investment or that land within a specific scheme is unsuitable for development,' she added.
Even where the land does have development potential, subdivision into small plots held by different owners may make it less attractive for acquisition by a company seeking to develop the site.
It adds that those operating land banking schemes often claim that they have well known banks, other lending institutions and established developers as their partners when this is not the case.
Members of the public have sometimes also been led to believe that planning permission has already been granted.
In some extreme cases forged Land Registry documents have been produced to suggest that there is official Land Registry planning approval. In other cases a letter has been produced showing Land Registry estate plan approval but it plays no part in granting planning permission for development.