FSA winds up landbanking firm plus the great govt land sell-off

Wed Jun 8 18:25:35 BST 2011

Grant Shapps on government releasing land for new homes
8 June 2011 - BBC politics - video
Campbell Ross from Shelter claims UK house 
building is at record low-levels as Housing 
Minister Grant Shapps announced thousands of 
acres of public sector land will be sold to house builders.
Every Whitehall department with a landbank is to 
publish plans on how it will release land to builders.
The minister and shadow environment secretary 
Mary Creagh are questioned on house building 
figures of the coalition and Labour governments.
http://www.bbc.co.uk/news/uk-politics-13697940

Landbanking firm hit with winding up order
 Plott UK given order in high court following FSA intervention
 Consumers invested £3.9m in landbanking firm
Mark King - guardian.co.uk, Wednesday 8 June 2011 16.30 BST
http://www.guardian.co.uk/money/2011/jun/08/landbanking-firm-winding-up-order
Plott UK Limited sold some sites located in an 
area of outstanding natural beauty. Photograph: 
Christopher Thomond for the Guardian
A landbanking firm has been issued with a winding 
up order by the high court after the Financial 
Services Authority (FSA) found it had been 
marketing plots of land as an investment 
opportunity and operating an unauthorised collective investment scheme.
Between May 2009 and April 2011, Plott UK Limited 
collected about £3.9m from UK consumers, 
promising investors returns of between 200% and 
300%. But at least one of the plots was located 
in a designated area of outstanding natural 
beauty and was highly unlikely to ever receive planning permission.
The FSA does not regulate land as an investment, 
but it does regulate the operation of collective 
investment schemes (CISs), which is how it is able to pursue landbanking firms.
Following the FSA's intervention, the high court 
made a winding up order against Plott and 
approved the appointment of a liquidator who will 
now identify, realise, and distribute the company's assets to its creditors.
Plott customers invested a minimum of £10,000, 
but the FSA said it is aware of many consumers 
who invested tens and even hundreds of thousands 
of pounds with the company. Until the liquidator 
has completed its investigation the FSA said it 
is unable to confirm whether any funds will be 
available to give back to Plott's victims.
The FSA said a company named European Property 
Investments (UK) Limited took over Plott's 
business once the FSA took action, taking a 
further £639,000 from investors between 1 April 
and 25 May 2011. The FSA said it had managed to 
freeze and secure £180,000, but the rest was 
transferred out of EPI's account before a freezing order was obtained.
It is now pursuing a civil case against EPI for 
operating an unauthorised CIS, but today's 
injunction means the firm will be breaking the 
law if it sells land or engages in any activity involving a CIS.
'Near-unsellable plots'
Many landbanking companies have been closed down 
in the UK after using misleading advertising or 
pressure techniques to persuade consumers to buy 
agricultural land at vastly inflated prices that 
subsequently turn out to be worthless.
Others went bust, such as United Land Holdings 
four years ago, disappearing with investors' cash 
and leaving them with near-unsellable plots. To 
date, there is still not a single example of a 
landbanking company that has made money for its investors.
Tracey McDermott, the FSA's acting director of 
enforcement and financial crime, said: "This is 
an important outcome and sends a warning to other 
unauthorised landbanks that the FSA can and will 
act decisively to shut them down.
"Consumers are much better off not putting their 
money into these schemes since, by the time we 
can catch up with the operators, most of the 
money has disappeared and investors are left with 
land that simply doesn't reflect the money paid for it.
"In our experience, operators of unauthorised 
landbanking schemes do not work in isolation  
they often work together and their schemes are 
evolving. We are working hard to stop them but 
the lesson remains: do not deal with unauthorised 
businesses as you are not covered by the 
Financial Services Compensation Scheme.
"Once the dust has settled we hope to be able to 
repatriate remaining funds to customers of both 
companies, but it is likely that some people will 
not get any of their money back."
If anybody thinks they may have been contacted by 
a landbank they should call the FSA's consumer helpline on 0845 606 1234.

100,000 new homes to be built on redundant publicly-owned land
http://www.telegraph.co.uk/news/uknews/law-and-order/8561683/100000-new-homes-to-be-built-on-redundant-publicly-owned-land.html
As many as 100,000 new homes could be built on 
redundant publicly-owned land, ministers will announce today.
By Christopher Hope, Whitehall Editor - 6:30AM BST 08 Jun 2011
Grant Shapps, the Housing minister, will announce 
plans to force Whitehall departments to release 
an area of land twice the size of Leicester to be developed.
A committee chaired by Cabinet Office minister 
Francis Maude, will go through the plans to make 
sure every possible site is made available for house-building.
The sale of the land could raise up to £10billion, according to experts.
A spokesman for Mr Shapps insisted the department 
would seek to get the best possible outcome for the taxpayer.
Land which will be sold includes the 57 acre New 
Covent Garden in Vauxhall, South London, will be 
redeveloped to provide a new modern market and 2300 apartments.
Mr Shapps said: Over the coming months, property 
specialists will work to make sure no stone is 
left unturned and no site is left unused, and 
every departments plans will come under the 
close scrutiny of a Cabinet committee.

UK to sell 10 billion pounds of public land to developers
http://www.financialmirror.com/News/Business_and_Finance/23655
June 07, 2011 -
Britain plans to sell public land worth an 
estimated 10 billion pounds ($16.35 billion) to 
address a chronic housing shortage and help erode its record budget deficit.
All government departments with significant 
landbanks will be asked to identify, by the 
autumn, land suitable for sale for homes, Housing 
Minister Grant Shapps will say on Wednesday.
This will be used to build 100,000 homes over the 
next three to four years, in a scheme that is 
expected to support as many as 25,000 jobs.
The 10 billion pounds estimate of surplus land is 
based on government figures for land values in 
England from HM Treasury in 2005, supplied by the 
Town and Country Planning Association (TCPA).
"As one of the country's biggest landlords, the 
government has a critical role to play in making 
sites available for developers so we can get the 
homes this country needs built," Shapps will say in a statement.
"Over the coming months, property specialists 
will work to make sure no stone is left unturned 
and no site is left unused, and every 
department's plans will come under the close scrutiny of a cabinet committee."
Some of the land will be sold under a "Build Now, 
Buy Later" deal, and the names of the first three 
sites -- to be made available immediately to 
developers -- will be announced on Wednesday.
"It will be a boost in the arm for 
housebuilders," said a spokesman at the Home 
Builders Federation, a 300-member trade 
association which represents builders such as 
Persimmon, Barratt Developments and Taylor Wimpey.
"We only built 100,000 homes last year and, if 
implemented practically, this could mean an extra 
30,000 homes a year, which is clearly a significant increase."
The HBF estimates a shortage approaching 1 
million homes in England, and forecasts 232,000 
homes need to be built per year to close the gap.
CHRONIC SHORTAGE
Britain's housing market has been slowing since 
the middle of last year and recent data show 
mortgage approvals fell in April to just half 
their long-run average, before the financial crisis, of 90,000 per month.
Last week it emerged housebuilders are in talks 
with British banks to find ways of helping buyers 
overcome tight lending conditions, which have caused market gridlock.
Housing organisations are concerned the land may 
not be sold at subsidised levels, leaving few 
incentives for developers to build affordable 
housing, of which there is a chronic shortage.
"With the Treasury under pressure to generate 
high sales receipts, decisions as to what kind of 
development takes place and where could be driven 
simply by the highest bidder," said Hugh Ellis, Chief Planner at the TCPA.
"The private sector could be left having to 
squeeze every penny out of development."

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