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UK Land Investments Group warns companies following unethical business practices in land investment market.
UK Land Investment Group (UKLI) has issued a warning on its website amid growing concerns that there are a number of scam companies / businesses operating in the land investment market.
It has come to our attention that there are number of businesses that are advertising plots of land for less than £10,000 with promises or guarantees of obtaining planning permission within a couple of years this offer sounds too good to be true because frankly, it is. Commented Brian Smith, Director of Strategic Land Buying at UK Land Investments Group.
The only way any company could deliver or guarantees you on such a promise would be if the land had already been re-zoned for residential development or had been granted outline planning permission already if this was the case then a typical plot of land in the South East with planning consent would be worth more than £100,000.
The plots of land being offered for £10,000 or less with a promise of planning consent in a couple of years is clearly unrealistic companies offer land at this price because typically it is cheap land without any real planning prospects.
As a responsible business in land investment market we are very concerned at the behaviour of the so called businesses because they actually intent on misleading customers to part with their hard-earned cash and we would like to bring in the kind notice of anyone who is interested in land to carry out a comprehensive due diligence before he/she decide on whether to invest. Schemes such as this are highly speculative and should be viewed with caution. In general any financial promotion that claims extraordinary financial gains in the past or promises them in the future should also be viewed in the same light. Here are few checks which one must do before investing in land scheme:
1. Check with the Land Registry that the land is actually owned by the company you are buying from.
2. Ask to meet their land buying and planning team and ask them how they can promise planning permission.
3. Check that their contract with you commits them to secure planning within their promised time-line.
4. Ask for their audited accounts to make sure that they have enough funds to pay for planning.
5. Press on seeing the site and ask their agent to give you sufficient reasons as to why the site is preferred if it is not next to current residential development then be very suspicious.
Smith concluded, we know from our own team of expert land buyers and planners that buying land can be an excellent, medium term investment with returns of up to 400% on land that is re-zoned for residential development - but we urge anyone looking at other businesses and considering land investment opportunities to be wary of any promises regarding planning permission.
About the Author: John Summer