Mortgage News
Former land banking broker exposes ‘scams’
A former broker has revealed the strategies used by land banking firms to sell strips of land to unwary investors.
The man worked for the Property Partnership, which sold virtually worthless plots across the UK, according to the BBC.
Believed to be controlled by Kent businessman Scott Assemakis, it is now in liquidation.
“Gareth”, not his real name, worked Property Partnership for three months in 2007.
“You are told if you just stick with the company for 12 months they guarantee you will be a millionaire,” he told the BBC.
He said brokers were given scripts to persuade people to part with their cash which were “pretty much 100% lies”.
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“We were saying that to make 100% on top of your investment should be the very least that we are looking at,” he said.
After three months Gareth left the firm as he was unhappy about how the firm was treating its clients and warned the police about its activities.
A strip of land investor William McNaught bought from the Property Partnership near Towcester in Northamptonshire for £10,000 in September 2009 is now valued at just £75, according to the BBC.
The Property Partnership’s owners have been keen to hide their identity. Shares for the parent company, Ultraclass, are held anonymously by a third party.
Assemakis has also sold land through Burnhill Land Investments Limited, and is involved with Complete Building Systems Limited, a company which has just been launched to do the same thing.
The FSA said it had closed down five land investment schemes in the past year, in which £42m had been invested.
Jonathan Phelan, head of unauthorised business at the FSA, said in March the regulator is investigating 20 land banking firms.
But the regulator can only act if it can prove a firm is effectively running a collective investment scheme where it liaises with potential developers on behalf of clients.