Mar 18 2008
Investing in UK Land
You might have found my blog because you were doing further research on this topic. 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:
- 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
- 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.
- This article by BBC mentioned that the plot you buy could have a huge mark-up of 10-100 times.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 requires a very long time horizon and returns are not guaranteed. 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, 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.
Reply
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
Nafferton
http://www.eastriding.gov.uk/PublicAccess731c/tdc/DcApplication/application_searchform.aspx
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.
Reply
Hi James,
Thanks for the direct link to the email.
Looks like the covenant was a fine (and critical) detail that might be missed out.
Something for the lawyers to work on.
Reply
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.
Reply
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.
Reply
Hi
I think its the same scam team changing spots the director is the same and all the offices in Asia match ?
Tim
Reply
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.
Reply
Hi Tim,
How do you know Land International and Oil Estates are operated by the same people?
Reply
They have the same Managing Director Simon Beh.
Reply
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
Reply
The UK Land Registry is responsible for registering and maintaining land records in England and Wales. They rarely issue opinions on commercial matters however the following press release recently came out 15th January. I have previously seen land banking companies in Singapore mention banks in their marketing as well.
UK Land registry publishes warning on land bank “investment” schemes.
http://www1.landregistry.gov.uk/about_us/pressoffice/notices/default.asp?article_id=19829
Land Registry has published a guide warning against so-called land banking investment schemes which are often advertised as offering big returns on investments in land.
The government department says many investors have handed over thousands of pounds for land that has little or no chance of being developed.
Plots of land are offered for sale, often online, and sometimes with the claim that there will be huge returns when planning permission is obtained for housing or other development. But the land is usually in areas protected from development by planning law.
Those operating land banking schemes often claim that they have well known banks, other lending institutions and established developers as their partners in the schemes when this is not the case.
Land Registry Head of Corporate Legal Services Mike Westcott Rudd said:
“Members of the public have been misled about the prospects of obtaining planning permission or that planning permission has already been granted.”
“Sometimes they are told well known banks, lenders and established developers are partners in the schemes when this is not the case.”
“In some extreme cases forged Land Registry letters have been produced to suggest that there is official Land Registry planning approval. However, Land Registry plays no part in the planning process.”
Reply
How can we be sure if the company is truely reliable for landbanking? What website can we check whether they had bought the plot and submit for planning permission?
Reply
lioninvestor Reply:
August 24th, 2009 at 7:46 am
Hi newcomer,
the local council will publish all applicants as well as the status on their website. This part is fairly transparent and you compare what they say versus what the land banking companies are telling you.
Note that submitting a proposal for planning permission does not automatically means it will be approved.
Reply
Dear Sir,
I am about to invest my Sin $30,000 into a Water Orton, Birmingham UK project via landbanking JardinSmithInternational in Singapore.
What risks must I be aware of ?
Thankyou.
Reply
lioninvestor Reply:
October 13th, 2009 at 9:37 am
Hi Suannee,
Sent an email to you.
Reply
Richard Reply:
October 13th, 2009 at 11:34 pm
Dear Sir,
Like Suzanne, I am also interested in Water Orton, Birmingham UK.
What is your advice?
Richard
Reply
hi, like suannee & richard, i’m also interested. appreciate your advice, please. Thanks.
Reply
Hi, I am interested in Jardin Smith’s offer too, any insight to share?
Reply
Hi everybody, I am really interested in JSI’s Water Orton Birmingham UK offer. Really need all the advice from you all to share, good or bad. I still have a few days to think and sign up the deal this weekend. Hope to hear from you all fast. Thank you very much.
Reply
For those still interested in UK land banking, please read about the dangers here:
http://www.lioninvestor.com/uk-land-banking/
Reply
If i were making such an investment I would check with the Planning Department UK local authority responsible for Water Orton before investing to find out the current status of the land.
http://www.northwarks.gov.uk/
Also you may wish to check with the UK land registry on the original purchase price of the land to understand its open market resale value without planning permission.
http://www.landregistry.gov.uk/
This would give you some approximate value for the land should you have to sell it without planning permission. Remember the price you pay may have no relationship to the current market value.
As with any land banking investment identify the written and contractual statements related to any committment being made to you on future development or planning activity. Be very careful of vague promises. You need to understand the real chance of the land being converted in any meaningful timeframe.
Reply
hi,
I have also attended jardin smith exhibition and paid 10% deposit for a plot of land at Water Orton Birmingham UK. However, after assessing the risk factor, I have my reservation and wanted to cancel off the whole deal. JSL did not mention to us that the land is currently under green belt area.
Can anyone advise me whether there is any ways I can get my 10% deposits back? Any help will be greatly appreicated. Thanks.
Reply
PCDS Reply:
December 3rd, 2009 at 3:53 pm
Gosh… me too, i juz attended the event at Ritz Carlton on Sunday and paid by credit card the 10% deposit. Need to be at their office today to pay up the balance 90%. There is no indication how those who paid deposit should do if they decide to withdrawal. Obviously they will not put such negative statement.
Reply
belinda Reply:
December 4th, 2009 at 11:26 pm
so meaning ya intend to pay the bal 90% today? or ya managed to withdraw and take back your deposit?
Reply
Sam Reply:
March 8th, 2010 at 10:32 pm
hi belinda,
did u get your 10% deposit back?
Reply
hi PCDS,
so meaning ya intend to pay the bal 90% today? or ya managed to withdraw and take back your deposit?
Reply
Hi All of you that posted queries on Water Orton and Jardin Smith. Any advise cos I went to a presentation a few days ago, but did not sign up yet.
Reply
Anybody wants to resume discussion on water orton and jardin smith? Seems like they have been trying to sell that piece of land since jan 2009?
I am checking if this is good investment to pursue..
Reply