Landbanks

Some large retailers (particularly Tesco) regularly purchase bits of land that have no obvious strategic advantage to them. However, digging a little deeper finds they do it to stop other retailers from buying the land or moving into the area to stifle the near monopoly that a retailer might have in a particular town or part of town.

Also, buying odd bits of land can later create ransom strip, especially if that area later becomes an access point to a development.

Some companies can also by land as a sort of investment for surplus cash - most organisations want to diversify their investments to reduce their risk of over exposure to a particular class of asset, so they will include the purchase of land as part of an overall diversified portfolio. Obviously, like anybody wanting to make a return on their investment, they will look to invest money in land where there is a potential for growth, hence why having a landbank in what might currently seem to be a back water, could over a period of 10~20 years become a substantial investment.

Perhaps I should have been clearer but this is not the use of the term to which I was referring.

I was talking about the process of a company buying up a farmer's field, parcelling it up into single house sized plots for sale as an investment to what I can only describe as the gullible, on the promise of the land quadrupling in value when PP is granted. Quite apart from the fact that the land is in an area where PP is almost never going to be granted the normal multiple for land with PP is 20 plus times farming value.

tim

There have been programmes about this scam before. Can't remember much, but one at least was aimed at the Asian community.

Tiddy Ogg.

But you've missed my point. The program wasn't about a scam.

They presented it as a genuine (albeit risky) investment opportunity that presented a risk to the environment when it came off.

ISTM that the TV people were being irresponsible. As this is a know investment scam it has zero chance of becoming a risk to the environment and they should have known better to present it as such.

tim

Maybe the Beeb knows something we don't when it comes to the Barker review et al, just looking at household formation figures and current levels of immigration means at least a small part of the greenbelt will soon be history, needs must, the alternative is people sleeping in Hyde Park.

.. hang on a minute!

Anyway, the OP is right, this is an outright scam and isn't even a legitmate gamble on the future of the greenbelt as the poor "investors" are already paying a 10,000% mark up on what is essentially reparcelled farmland. There is clearly money to be made, but out of the people who think there is money to be made.

In message , tim..... writes

The risk to the environment is there whether the land is owned by a 'landbank' or not.