sound investment? Inside Out goes undercover.
It sounds like the perfect deal - buy a piece of the English
countryside, apply for planning permission and sell it on to developers for a
But scores of investors across the country have been tricked
into handing over thousands of pounds for land that has no chance of ever being
An investigation by Inside Out has exposed one "landbanking"
company that has convinced investors to pay above the odds for sites that have
little or no development potential.
Commercial Land, formerly European Land
Sales Partnership (ELS), specialises in buying agricultural land and dividing
it into tiny plots, which it then sells to investors at £5,000 for every
It tells investors they could get a five-fold return on their
money if planning permission is granted.
What it does not say is that the
development potential of the sites it is touting is non-existent.
Three employees tried to convince BBC journalists posing as
potential investors to hand over £10,000 for a small piece of land near
Yeovil that planners are adamant can never be built upon.
Land - which has never won planning consent for any of its holdings - is currently
marketing a four-acre site near the hamlet of King's Stag.
During a meeting
at the company's London headquarters, a salesman claimed the local council had
written to them saying the land in King's Stag was "suitable for housing
and also for commercial use".
of the plot buyers, Satish Mehta, but is it a good deal?|
salesman, who said between £30,000 and £50,000 could be made from
a £10,000 investment, claimed the quiet rural hamlet would soon be part
of the suburban sprawl.
He added, "go back there in five, six years
down the line and it will be very built up".
The company's own in-house
planning specialist went on to claim it would not be long before planning permission
- for either residential or commercial use - was secured.
He said, "It's
just a matter of time to see when we get planning permission in 2008 so it's not
too far away.
"They [the council] are always saying this is what we
need at the moment."
In fact, North Dorset District Council has told
the BBC there is no chance of development, not least of all because the area actually
has an oversupply of homes.
Nick Fagan, the council's Development Control
Manager, said of the chances of the site winning planning permission:
nothing - there's no chance at all of ever getting planning permission here.
did send them a letter. It said there's no chance of developing this land, basically
"I feel this company is trying to sell land to people on a fraudulent
basis. They are cowboys and they should be closed down."
If the company successfully sells all 112 plots
at King's Stag, it will make about £750,000.
Its main partner, Stephen
Cleeve, paid just £30,000 for the site in September 2005.
who is banned from being a company director for eight years after a previous investment
scam, has already been the subject of a public warning issued by the Australian
authorities over his tactics in selling UK land overseas.
In this country,
the Serious Fraud Office - despite deciding not to prosecute Mr Cleeve - has said
there is evidence that investors have been misled by ELS in the past.
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