Land development scams fool British investors

More and more people are being targeted by firms cold-calling them to buy land they say is ripe for development. Many are persuaded to pay tens of thousands of pounds for land which is unlikely ever to be built on.

The Financial Services Authority (FSA) said it was investigating about 20 such schemes. The City of London Police's Economic Crime Directorate said what it had seen so far was the tip of the iceberg.

William McNaught, from Yorkshire, was contacted by The Property Partnership three years ago and persuaded to pay £101,000 in order to buy eight strips of land in different locations around the UK. He said he was convinced by the high returns which were promised."They were so convincing. The broker told me the investment would achieve a profit of 100-130% in a period of 12 to 18 months," he said.

Radio 4's Money Box has investigated a strip of land Mr McNaught bought near Towcester in Northamptonshire for £10,000 in September 2009. Instead of being close to development, the land is within the boundaries of the historic Easton Neston Estate and the local council has served further restrictions which mean not even fences or agricultural sheds can be erected.

John Townsend, the councillor responsible for planning at South Northamptonshire District Council, said the area was protected to prevent any sort of development. "It is in open countryside, it is in a conservation area, there are endless reasons why I think it would very unlikely that planning permission would ever be given," he said. "Nothing can be put here, they cannot put up any fencing, they cannot put up any sheds or huts."

Source: BBC News

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