In the news it was stated recently that investors, since 2007, may exceed £30 million in landbanking.
The Insolvency Service is warning the public to be alert to the unscrupulous practice of landbanking as figures indicate that these scams are on the increase. Since 2007 Company Investigations, part of The Insolvency Service, has closed down 49 landbanking companies in England and Wales that have collectively caused the public to lose over £30 million.
Reputable IFA’s of Bishop’s Stortford like Enable would like to bring this disreputable practice to the attention anyone thinking of investing in land. Landbanking involves a plot of land - often green or brown belt - being bought by "developers" and then being sub-divided into a number of smaller plots which are then marketed, often under the false pretext that planning permission will be granted for development.
The Insolvency Service has seen a 33 per cent increase in the number of complaints it has received (2009-2011) against companies involved in these scams and a 100 per cent increase over two years in the number of complaints about landbanking scams accepted for investigation.
Robert Burns, Head of Investigations at The Insolvency Service, said:
"It's clear that landbanking scams are designed to target the more vulnerable investor, many of them trusting pensioners who are eager to see a greater return on their savings or pension lump sum than they could ever expect from traditional savings and investments. Tragically this often leads them to rashly invest in what seems to be, on the face of it, safe 'get-rich-quick' schemes."
"We need to alert people to the warning signs and the fact that if a scheme seems 'too good to be true', that's usually because it is. ‘’
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