Land Registry repeats warning about land banking schemes as victims' losses reach £200 million
Land Registry 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. These are schemes where it is claimed that the plots of land have good investment value in the expectation of future development but where there is little or no chance of land ever being developed. The Financial Services Authority (FSA) recently estimated that land banking schemes have cost UK investors as much as £200 million.
Public Guide 21 - Land banking schemes - warning - plots of land in England and Wales offered for sale claimed to have development or investment potential originally published in December 2008, now includes contact details for organisations that can recommend independent advisers to members of the public considering investing in a land banking scheme. It also explains the role of regulatory bodies relating to land banking as well as how to report instances of such activity.
Jane Allen from Land Registry’s Corporate Legal Services said:
"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. Some companies offer UK land plots from the Far East where the local authorities do not regulate such activities, or are not aware of the high-risk nature of the investment.
"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."
Notes to editors
- The Law Society can provide details of independent solicitors specialising in property law. Details of registered valuers are available from The Royal Institution of Chartered Surveyors. Some schemes can be investigated by The Financial Services Authority - the financial regulator for the UK.
- Land Registry does not provide advice about the investment or development potential of any particular scheme and cannot confirm whether or not land or a particular transaction is part of a land banking scheme or whether a scheme is suitable for future development. It plays no part in the process of granting planning permission for development.
- Land Registry is obliged to register transfers of plots within land banking schemes if all the necessary legal formalities have been met for that transfer. It cannot refuse to process applications even where it may suspect that the seller has been operating an illegal collective investment scheme or misrepresented the value of the land transferred.
- With the largest transactional database of its kind detailing over 22 million titles, Land Registry underpins the economy by safeguarding ownership of many billions of pounds worth of property.
- As a government department established in 1862, executive agency and trading fund responsible to the Secretary of State for Business, Innovation and Skills, Land Registry keeps and maintains the Land Register for England and Wales. The Land Register has been an open document since 1990.
- For further information about Land Registry visit www.landregistry.gov.uk
Marion Shelley 0300 0067543, 07790 690297