1: If I could sell this plot today on the open market what will I get for it ?
2: What is the latest date that they will apply for planning permission on this land.
3: If the company should fail how do I get the planning permission service and sell my tiny plot and get my money ?

If you pay $100 for something that is only worth $2 then capital appreciation doesnt get your money back until you are long dead. Even then inflation will destroy any benefit.

The facts say with UK plot land banking most of your money is going towards a future service that almost certainly will not be delivered. If it is delivered it almost certainly wont be successful. Uncertainty * Uncertainty = not going to happen.

Most of your money is NOT invested in the land. The true value of the land is much lower than anything you hand over UNLESS the land gets planning permission. Based on all evidence it is pretty certain it wont.

Some people buy magic rocks , some people believe in father christmas, some people buy breast enhancement cream, some people buy land banking plots.

Some people like to believe in magic and they like to believe the magic favours them. Some people continue to believe in things that dont work despite all evidence to the contrary and will deny all attempts to inform them.

All scammers understand this and thats why a certain portion of any population is open to being cheated.

http://www.bernama.com.my/bernama/v3/news.php?id=367182

KUALA LUMPUR, Oct 24 (Bernama) — The Companies Commission of Malaysia (SSM) today raided three companies suspected of offering investments in illegal land investment schemes.

The raids were conducted simultaneously at the UK Land International (M) Sdn Bhd, Profitable Plots Sdn Bhd and Edgeworth Properties (Malaysia) Sdn Bhd.

http://www.moneyobserver.com/content/sod%E2%80%99s-law-comes-little-too-late

“While the swindled try to recover their losses, devious landbanking companies are moving into other areas in their search for gullible investors. A quick search of online investment forums shows that parts of Ireland are still under attack from landbanking advertising and cold-calling; while the founder of UK Land Investments is reported to be active in the Middle East.

Incredibly, some financial media outlets continue to carry advertising from landbanking companies. In late June 2008, The Motley Fool website had to apologise after it sent an email to subscribers carrying an advert from CLS stating: ‘Landbanking gives you a VERY low risk and potentially VERY high return investment opportunity!’

It remains the case that Money Observer does not know of a single landbanking scheme that has received planning permission and created wealth for its investors. In contrast, there are still thousands of investors holding tiny, worthless patches of land up and down the UK. The simple advice is: don’t become one of them.”

You know, in Singapore many have this kind of thinking “if it’s a scam, sure the government will take action and the fact that government does not take action means land banking most likely is not a scam”…

i agree with Tan Kin Lian, regulatory should be more pro-active in tackling the scams that are getting more and more sophisticated in Singapore…

The buying and selling of land for profit in the UK is not illegal and can be very profitable if you know what you are doing. With plot based land banking most of your money is not going into land it’s going into paying for a service .

With plot based land banking you buy a small piece of low value land. You also buy a service to collectively apply for, and hopefully obtain planning permission and then sell the land onward at a profit.

In a real example UK land was purchased by the land banking company at S$1000 a plot without planning permission. That land is sold today by the land banking company at S$15000 per plot without planning permission.

What do you get for your S$14000 mark-up? The land banking company say they will apply for planning permission on your behalf and if successful negotiate a collective sale at much more that S$15000 per plot.

This by the FSA (UK Financial Services Authority) definition is a collective investment scheme because a group of investors rely on the future services of an individual company to make the investment work. If you offer collective investment schemes in the UK then you have to be licensed by the FSA because there is a huge risk for both mismanagement and fraud. Unfortunately once most or all of the plots are sold Land Bankers have been known to take the money and run, or go bankrupt with mysteriously no cash available to refund investors. Or simply there is no chance of planning permission and they fail to notify you clearly of the real risks.

Its a highly profitable business. These companies often operated for a few years before the FSA caught up with them. Presumably they could not meet the requirements to get licensed so were either shut down or chose to go into voluntary liquidation in the UK and move their operations overseas.

High level FSA requirements are here.
http://fsahandbook.info/FSA/html/handbook/PRIN/2/1

Note that FSA licensing does not guarantee an investment but it does mean it’s managed within a certain set of rules.

I have no connection with either the FSA or any Land Banking Company.

There were fraud in the way the products were designed and marketed. Like a scam. I hope that the regulator (MAS) will take pro-active actions to investigate this matter.

Do not sweep it under the carpet.

patriot

It looks like these land banking plots are allowed to be sold in Singapore. Perhaps, this is an example of the pro-active action that should be taken by our Singapore regulator. If it is disallwed in the UK, there are reasons to study how to disallow it in Singapore.

It may be difficult for the regulator to act on private sales, but they can certainly act on advertisements in the newspapers and television.

In the UK, the regulator (Financial Services Authority) are quite active in taking action against business practices that are unfair to the public. The regulator in Singapore is not active in this area. This is why more scams are happening in Singapore.

If the topic is used for the next outing.. I would like some discussion on the current unregulated advertising of all sorts of “gurus” – forex, stock, internet … who uses explosive gains, fake phds to entice people to sign up for courses for a few thousand dollars.

In the UK you can say Land Banking is a scam and the papers often do because there are many thousands of cases of good people losing all their money. There are no audited cases of end plot investors being successful . One of the biggest property booms ever just ended at the end of 2007 in the UK so you would expect that there should have been some plot based land banking success in 2006 and 2007 but there was none.

Many of the Land Banking companies with similar names to those now operating in Singapore offering UK plots have been shut down in the UK by the FSA and are NOT allowed to offer those plots to people living in the UK.

As a Brit let me say this. Imagine I was offered plots on the Padang in Singapore by a UK company that was not allowed by MAS to operate in Singapore. Would you Singaporeans suggest it as a good investment ? It is open land in the middle of the city. Ideal for building on and Singapore is short of building space. Would you expect the Singapore government to protect a stupid foreigner who made that investment ?

Dont invest in what you dont understand.