You could be forgiven for thinking that ‘land banking’, that has been in the news recently, is something to do with obsessive-compulsive property developers or a technique for beating your opponent at Monopoly. So if that isn’t the case, what exactly is it?

Land banking means buying undeveloped land with the intention to split it up into smaller plots and then sell these plots on to buyers at inflated prices. The plots will sometimes be offered with the claim that the buyer will make huge returns on the investment if planning permission is granted at a later date. They can also be offered for sale to buyers from the UK or abroad, and the focus is on the ‘potential’ future value of the land against the current selling price.

The land in question is often ‘green belt’ – farmland, parkland or open country which is protected from urban development by planning law. Alternatively it could be agricultural land where no development is ever likely to be allowed. The sellers, who may not always be based in the UK, will not usually mention that the land is protected and can’t be developed under current planning regulations. However, even if the land does have development potential, dividing it into small plots held by different owners may make it less attractive if a company wanted to develop the site.

What is Land Registry’s role in this?

We aren’t involved in land banking schemes directly. But as we are responsible for maintaining the register of land and property in England and Wales, we have to register transfers of plots within land banking schemes. We can’t refuse to process these, even if we suspect that the seller has been operating a land banking scheme or has misrepresented the value of the land. However, we liaise with regulatory and law enforcement bodies like the Financial Conduct Authority, the Insolvency Service and the police with the aim of preventing any illegal activity connected with land banking and we share information wih them relating to known or suspected land banking schemes.

What can you do?

If you are offered an opportunity to buy land for its investment value, the first step you should take is to question the information you are given and consider getting independent legal advice.

If you are already registered as the owner of a plot within a land banking scheme, we recommend that you make sure that your own address is entered in the register rather than just an address which is ‘care of the seller’. This will make sure that if we need to write to you, we send our letters to your address.

If you think that you have been a victim of fraud, you should contact the police.

Places to get help and advice

You will be able to get more information about land banking from the following organisations.

Financial Conduct Authority
25 The North Colonnade
E14 5HS.

Their page about land banking offers advice or you can call the FCA’s Consumer Helpline from Monday to Friday, 8am to 6pm, or Saturday 9am to 1pm, on:

UK: 0800 111 6768 (freephone) or 0300 500 8082
From abroad: +44 20 7066 1000

FCA contact form: fca.org.uk/contact

The Law Society can give you details of the independent solicitors specialising in property law. Its online Find a solicitor service helps you to search for property solicitors in your area.

The Law Society
113 Chancery Lane

UK: 020 7242 1222
From outside the UK: +44 (0)20 7242 1222

Royal Institution of Chartered Surveyors (RICS) can also give you details of registered valuers.

Royal Institution of Chartered Surveyors
Parliament Square

UK: 0870 333 1600
From outside the UK: +44 (0)870 333 1600

Department for Business, Innovation and Skills
1 Victoria Street

Siwan Sloman
By Siwan Sloman,
Welsh Translator at HM Land Registry