Mar 18 2008
Investing in UK Land
I mentioned in my previous post on Jardin Smith International Singapore that I will be elaborating more on UK land banking (or strategic land investment). Other than Jardin Smith, there are a few other companies offering this product in Singapore, two of which are Uk Land International and Profitable Plots.
If you have found my blog because you were doing further research on this topic, good for you. In any investment (especially non-regulated ones), it pays to do your due diligence before you commit any sum of money.
Successful investing is all about managing your risks and if you do not know what your risks are, you stand a higher chance of losing your hard-earned money.
One approach I take when doing any research on a new unregulated investment product is to search google for that topic with the word “scam” added behind. While there are both truths and lies sprouting on the internet and you would be wise to take things you find with a pinch of salt, the internet is still a good starting point for any research.
If you search “Uk land investment scam” in google, you are likely to find a couple of sites discussing about UK land investments. There is one site which stands out: Property Scam, which is dedicated to discussing everything about UK land investments.
From that site, I found out a few things:
- Besides Jardin Smith International, Profitable Plots and UK Land International, there are dozens of land investment companies around the world dealing in UK land investment. The list includes:
- Hambrook & Greenstock
- Property Spy
- Land Investment Association
- Townfield Land Investments Limited
- English Land Partnership (ELP)
- European Land Sales Partnership
- Exposed by BBC “Inside Out”
- UK Land Investments Group (UKLI)
- One of their past auditors, Moore Stephens, discharged themselves
- UKLI respond to Moore Stephens’ resignation
- Posted misleading claims on their website about their partners
- A few of them have ceased operations and their investors are left holding the land they bought from them.
- So far, there has not been any documented success of planning permission being obtained by these companies.
- The plot you buy has a huge mark-up of 10-100 times. Read this article for examples. That is how most of the companies has been able to expand so rapidly even though they do not have any success stories yet.
While I cannot ascertain that everything written at Property Scam is true, investing in UK land through a land banking company can be a highly risky affair. However, the returns are very high if planning permission can be obtained.
If you are considering investing, please do your due diligence on the company you are investing with, and only invest with a company you can trust (and with money you can spare). Good luck.
[...] Tomorrow, I will write about some of the things you need to be aware of if you are investing in UK land. [...]
People seem to be confused by the planning process in England. Land ownership does not change anything without planning permission (or Zoning for people more familiar with the US) .
You can formally ask planning permission for anything. Asking does not confer any value on the land unless the answer is likely to be yes. Unfortunately some people keep asking the same thing even when there is no chance of success for reasons that are not always to do with getting planning permission.
This may be different from Singapore where perhaps people assume that formally being in process with the Government over land means a “yes” is likely.
I can see why it might be confusing to a foreigner and many of us Brits think that allowing spurious planning claims on land is a waste of taxpayers money.
The UK process is public and you are free to ask any question you want. As an example the application 073130 on the link below was actually made by the Strategic Land Planning Trust (part of the Profitable Plots Pte company or the Profitable Plots Group) for a site called Cherry Tree Grove.
Colchester has one of the most transparent online planning systems. You can follow the process, ask questions, make comments and make your own decisions. You can also see who is for and against it and why.
http://www.planning.colchester.gov.uk/WAM/findCaseFile.do?appNumber=073130
If your readers are thinking about investing it is probably a reasonable question for you to ask your land company the number of the planning application and write to the council concerned and ask them for details on the application.
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Hi Tony,
Thanks for sharing the link. It will be useful for people holding the Cherry Tree plots to monitor the progress for themselves. For now, it appears that there is quite a lot of objections from the residents of that area to this plan.
Do the other councils have a page like this where we can check as well?
Acutally, it’s clear (at least to me) that an application is just that, whether it is granted or not is a different thing altogether. The entire process might take many, many years as the needs of the local population changes.
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Many councils are not as advanced as Colchester. Councils do generally have to make the documents available for inspection but this would normally be in in the local council offices. This is usually good enough as it is generally locals that are interested.
Here is a couple for you. I’ll be happy to help look others out if you have people interested.
Hounslow
http://www.hounslow.gov.uk/index/environment_and_planning/planning_dev_control
(No applications I could see currently for Concorde Village)
Nafferton
http://www.eastriding.gov.uk/PublicAccess731c/tdc/DcApplication/application_searchform.aspx
(No applications currently for the PP Nafferton site but i did notice a withdrawn application for a similar area some years ago)
If you can’t find something my limited experience to date is that if you write to them by post or email they will respond within a reasonable time frame.
I think your opinion is valid. There may be an occasional “black swan” event that would cause an unexpected planning approval to occur but typically planning for houses and hotels is done well in advance and the local players involved know what is likely to happen and likely to be approved. This will be reflected in the sale value of the land asset now and in the future.
My opinion is most landbanking companies are buying at the true value - they are not not selling at the true value
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Out of curiosity I just took a browse through the Colchester planning site for Cherry Tree Grove mentioned above.I found this site very interesting. Thank you for posting the link.
Apart from the refusal of planning permission for this site according to the council there is a covenant on the land. It was sold as agricultural land by the council. If the land is ever used for commercial purposes the current owners would have to pay the current full commercial value of the land. The purpose of the covenant presumably was to stop allegations of mis-management by local council tax payers if the land was sold cheap and then gained planning permission. While the land might gain significantly in value if planning permission were approved none of that gain would pass to the plot owners. It would pass to the local council. Based on this I cannot see any possible way a plot owner could ever make money from this land.
This is a long link but if you paste it all it takes you straight to the document.
Click here for the document.
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Hi James,
Thanks for the direct link to the email.
Looks like the covenant was a fine (and critical) detail that was missed out.
If it still applies, that would be a disaster for Cherry Tree plot owners and profitable plots.
Something for the lawyers to work out.
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A couple of insights on the planning process in the UK.
As said it is a process and thus can take sometime. An application can only made once the the Council’s core strategy is out..This provides details on the requirement of land by the council.
This happens as in the UK over 90% of the land is in private hands. Thus the govt rarely can mandate development. What the do to control the process is thru the issuance of planning permissions for suitable projects.
A benefit of this is when the land gets planning it value can increase by anything from 300 to a 1000 percent.
Investors can thus benefit by purchasing strategically located and getting it rezoned under the core strategy.
There are several criteria to look for but basically it has to be sustainable ;ie there must be infrastructure around it like transportation, schools ,pubs etc. A full information can be found under the Planning Policy Strategy papers available at the govt’s Communities and Govt website.
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Hi Mike,
I just found this on the web, is this company Land International Far East connected to Oil Estates they share the same office addresses???
Insolvency Bulletin
Provisional Liquidator Appointed to Land-banking Company
LAND INTERNATIONAL LIMITED
LAND INTERNATIONAL (UK) LIMITED
LAND INTERNATIONAL (MARKETING) LIMITED
LAND INTERNATIONAL (FAR EAST) LIMITED
The Secretary of State for Business, Enterprise and Regulatory Reform has presented a petition in the High Court to wind up the above companies in the public interest.
The companies were involved in the acquisition of agricultural land, which was then sub-divided and sold to the public as an investment. They operated from an office at 6 St Georges Street, Cheltenham GL50 4AF.
The petitions were presented following an investigation carried out by BERR’s Companies Investigation Branch under Section 447 of the Companies Act 1985. The petitions are listed for hearing on 5 March 2008.
The case is now subject to High Court action and no further information will be made available until the petitions are heard in the High Court on 5 March 2008.
Notes to editors
1. The registered office of all the companies save Land International (Far East) Limited are at 6 St Georges Street, Cheltenham, Gloucestershire, GL50 4AF. The registered office of Land International (Far East) Limited is at 1 St Georges Street, Cheltenham, Gloucestershire, GL50 4AF.
2. The petition was presented under s124A of the Insolvency Act 1986. The Official Receiver was appointed provisional liquidator of the companies on 23 January 2008. A provisional liquidator is appointed by the court to protect the assets of a company after a petition has been presented.
3. The Insolvency Service carries out confidential enquiries on behalf of the Secretary of State for Business, Enterprise & Regulatory Reform through Companies Investigation Branch.
4. The Insolvency Service administers the insolvency regime investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver to establish why they became insolvent. The Service also authorises and regulates the insolvency profession; deals with disqualification of directors in corporate failures; assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees; provides banking and investment services for bankruptcy and liquidation estate funds; and advises ministers and other government departments on insolvency law and practice.
5. All public enquiries concerning the affairs of the companies should be made to The Official Receiver, Public Interest Unit, 21 Bloomsbury Street, London, WC1B 3SS. Email: piu@insolvency.gsi.gov.uk Public Enquiries: 0207 637 1110
6. Further information about the work of The Insolvency Service is available from http://www.insolvency.gov.uk
[Reply]
Hi Tim,
I wrote about this earlier:
http://www.lioninvestor.com/uk-land-investments-to-be-liquidated/
Not too sure where oil estates figure in all these. They could have taken over the office space.
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Hi
I think its the same scam team changing spots the director is the same and all the offices in Asia match ?
Tim
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I’ve learned that for any land-banking investmets one must always exercise “DUE DILIGENCE” so what I eventually found out is the word …..ACCREDITATION STANDARDS “BBB” or Better Business Bureau especially in land investments in US & Canada whereas I’ve no idea about UK Accreditation Standards if any?
[Reply]
Hi Lioninvestor,
http://www.oilestates.com http://www.landintfe.com Sherwood Henderson International are all part of the Land International Group which is now selling the same scam land at Gatwick through the http://www.landwealthcentre.com
They have been closed down in the UK by the FSA but are still operating in Asia
NEWS: Land International Far East
Four companies operating from Cheltenham and selling plots of agricultural land have been closed down by the High Court following an investigation by the Companies Investigation Branch of the Insolvency Service.
The companies began trading in early 2004 by purchasing land in greenbelt areas across England, which were then sub-divided into plots of typically 400 - 500 square metres. In excess of 700 plots were sold in this way to the public.
Potential investors in South East Asia were also targeted through Land International (Far East) Limited. The common directors for the four companies were Michael John Morris and Stephen Nicholas Meissner.
The investigation found that during the sales process, prospective investors were told by the companies sales agents that the selling company in question would be seeking to obtain planning permission on their behalf, with the accompanying sales literature disclosing that separate management companies would be set up to deal with planning permission on behalf of plot owners at each site. In reality there was no prospect of planning permission being obtained.
All four companies failed to maintain adequate accounting records. Land International Limited had failed to file any accounts since incorporation in 2003, missing statutory deadlines for filing accounts for its first three accounting periods. This failure to maintain adequate accounting records assisted in attempts to mask the extent of the companies’ trading activities including to properly account for their corporation tax liabilities. Applying the average plot selling price to the plots sold suggested that the total revenue would have been in excess of £10million.
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Hi Tim,
How do you know Land International and Oil Estates are operated by the same people?
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They have the same Managing Director Simon Beh.
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Hi Tim,
I have run through a lot of your postings and it seemed that you are targetting in particular Land Int and its other companies. I have also seen a reply from one William about you disgruntlement with LI and that you are an ex-staff of LI. Care to clarify? As a neutral person, it will do me a great favour. Your company and tel no was also posted in the net. Why out to confuse us?
Joanna
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