icblog-bannerimage2
INSIGHTS Expert Opinion & Investment News

BLOG Latest

MEDIA Latest

NEWS Latest

THREE WAYS STRATEGIC LAND INVESTMENT DIFFERS FROM LAND BANKING

The process of investing into strategic land can occasionally get compared with the unsatisfactory practice of land banking. Put simply, they are not the same and in this article we’re going to give you three clear differences between the two.

The Financial Services Authority (FSA)* estimates that UK investors have lost out on as much as £200 million from land banking scams over the years, and in one of the worst examples it had seen a land banking scheme cheat investors out of a huge £3,000,000 for a greenbelt site with restrictive covenants that limited its use to purely agricultural.

Investing into strategic land however, whether as an individual or as part of a larger group or corporate entity such as Intro Crowd, is an entirely different proposition.

  1. Realistic timescales

    At Intro Crowd, we know that most strategic land acquisitions simply don’t happen overnight. In fact, we estimate for all our opportunities a period of 3 – 10 years before completion hence why we classify them as a medium-to-long-term investment. Most land banking schemes however, will lead you to believe that things will happen overnight and that investors will see a quick return on investment.

    While land-banking schemes will reach out through cold calling and high-pressured sales tactics, strategic land investment works slightly differently. Individual investors, if investing alone, will handle the process themselves from acquisition to a potential sale of the site with planning permission. At Intro Crowd, we only work with qualified investors (those who complete our accreditation process and self-certify as either High Net Worth or Sophisticated Investors). All our sites are subject to a rigorous due diligence process and all findings are readily available for our investors to view via our online platform, alongside third-party reports from industry professionals.

  2. Experienced professionals handle the process

    The right strategic land opportunities are investigated and researched at length whether by investors acting alone or, in the case of Intro Crowd, by an experienced planning team with a track record of success within the industry along with the help of experienced chartered surveyors regulated by the FCA. The FCA on the other hand, points out that most land banking schemes may not be authorised by them, while sales people and promoters believe they can handle the planning permission process themselves.

  3. A strategic outlook is crucial

    Homelessness charity Shelter highlights that a strategic outlook is essential for future developments. It offers developers more control when they look to build properties – however land banking exists mainly so that companies can take the profits from the sale of the land. There are also concerns that land banking may secure areas of the greenbelt, which can’t be developed upon.

    In contrast to this, at Intro Crowd we only consider undeveloped greenfield sites in areas that we believe have potential for future development. Typically the sites we select will be a part of or close to an existing settlement with good road access and access to local amenities – in turn this can make them sustainable in nature which can be attractive to house builders.

For more information on Intro Crowd and what we do, please do not hesitate to contact us on +44 (0)20 7118 4040 or via email at incrowd@introcrowd.com

*The FSA has been replaced by the PRA and FCA as of 1st April 2013

This article is for educational purposes only and does not constitute investment advice. This article does not amount to an invitation or inducement to buy or sell an investment nor does it solicit any such offer or invitation in any jurisdiction.

In all cases, readers should conduct their own investigation and analysis of the data in the article. Readers are strongly encouraged to seek independent legal and financial advice when considering an investment in strategic land. All statements of opinion and/or belief contained in this article and all views expressed and all projections, forecasts or statements relating to expectations regarding future events represent Intro Crowd’s own assessment and interpretation of information available as at the date of this article.

No responsibility or liability is accepted by Intro Crowd for reliance on the contents of this article.

Follow Us