Land Banking is where you buy a plot of land in the hope (or knowledge) that the land is likely to increase in value when somebody later wants to buy it and develop it.
There are plenty of investment companies out there offering land banking investments, some of which are considered by some pension providers and financial advisers to be suitable for SIPP pensions.
But Land-banking investments are high-risk investments, that are unregulated by the FCA and in some cases, are outright scams.
The financial services watchdogs even built a page warning against the practice, as sometimes the same plot of land is sold over and over again to different people.
It is thought that Land Banking schemes may cost UK investors up to £200m.
Not all land banks are scams, but they are ALL high-risk and unregulated, with many investors having been mis-sold, which may mean they can claim…
Can you claim for a mis-sold Land Bank investment?
Several financial advisers and the FSCS have been paying out compensation for mis-selling high-risk investments like land banks via SIPPs and SSASs for a few years, with Spencer Churchill Claims Advice often leading the claim on a No Win – No Fee* basis.
If you:
Transferred your pension to a SIPP
Invested in Land Banking Schemes or other high-risk investments
Aren’t earning over £100k per year
Aren’t a Sophisticated Investor
Then you may have been mis-sold, and you could be able to make a claim for negligent SIPP advice.
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What are land banks?
As explained above, land banks are where investors (or investment companies) buy an area of land because they believe the land will increase in value, allowing them to sell it for profit in the future.
There are numerous factors that may lead an investor to believe this would work (and of course, sometimes it does), including that a town is reaching capacity, a new jobs will be in the area that means more people will be looking to move there, or simply that the land is primed for some sort of development.
However, there are plenty of risks associated with land banks too. What if planning permission is never granted due to locals rejecting it? What if an important species is found that means the area must be protected? What if those jobs never come to the area and there is no need for new housing?
More obviously, is that Land Bank investments are ALWAYS high-risk investments because they are not regulated by the watchdogs at the FCA.
