ukinvestor

Greetings Folks,

I was wondering if anyone has any sort of information on the latest investment opportunity being offered in Bromley, Kent (south East England) by UK Land Investments Group.
As I have never been to UK, it seems to be a difficult investment decision, though I am interested to review this opportunity and add it to my investment portfolio.

Here are some more details:

Location: New Addington

• Plot Price: 13,200 Pounds or 11 Lac Rupees
• Approx Size: 250 Sq. Meters
• Tenure: Free Hold
• Plots for sale: 184
• Total Plots: 619

• Under 30 miles to Gatwick, Heathrow, and London Airport
• 6 miles to M25 Motorway
• 2.8 Miles to Hayes Railway, Kent
• 9 miles to Lewisham DLR Station
• 7 miles to Croydon Town Center
• 16 miles to Central London

I would welcome all kind of advice.

Thanks in advance.

paulsmith

Hi Mark

I live in South London, very close to Bromley. I took a quick look at the website, I could only see plots in Keston, which is not New Addington.

The site seems interesting, but I personally would want lots and lots of information before I part with my hard earned cash and I would never ever by blind.

Bromley and Keston are good affluent areas where property and land prices are going up by about 5% - 6% per year, but there are some questions I would be asking first:

Why is the plot so cheap in an area where the average house price is £250,000 and in Keston the prices go above the millions.

Does the land have any form of planning premission for building, if not, all you own is a piece of land that you can do nothing with. That does not mean the value will not rise, but how much will it rise by.

Are you issued with title deeds for the land, if not then you don't actually own it.

I hope this helps a little, if i can be of further help just ask.

Regards

aneesha

Hello folks,

I happened to visit their site, though it does not have much information on it.
They are offering different areas to the Indian customer as compared to the UK customer. I could not find any ROI figures on their site on the stipulated investment. Their site does not say anything about % ROI but in terms of no. of years, they advise to wait for 5-7 years to encash the plots.

Aneesha

richardnelson

I have been working with similar companies from UK and here is my response:

While you may not find figures on Return on Investment, what you will find is the value of the plot after it is allocated for development. This is based on today’s actual values and is not a projection. Likely the price 5 years in the future will be more than today’s price. In terms of ROI, it works out to a 400% return on your investment, based on current prices. With inflation and natural appreciation in the next 5 years, your actual return could be significantly higher.

Picture in your mind, a scale with 0 on one end and 7 on the other end. 13200 GBP is the price today and 53000 GBP as the price in year 7. The price you will get will depend on what point in between 1 and 7 you want to sell. For example, if want to sell in year 4, the person buying from you only has potentially 2 or 3 years to wait, maybe even less. Your plot will then sell at a premium because it is 4 years old into the rezoning scale.

rameshkumar

What if the zoning never happens i.e. these plots never get approved for zoning? So won’t this investment go down the drain as “dead investment?”

richardnelson

These companies have extensive experience in Land Buying. They carry with them years of expertise and success in getting sites allocated for development in the shortest possible time-frame.

Furthermore, on a more technical level, an application for allocation can be re-submitted every 6 months and there is a compulsory review every two years. In the unlikely event that some issues or obstructions crop up, they have sufficient time, opportunity and resources to resolve and re-apply. It is in the local authorities’ own interest to allocate sites for development every year as they have stiff house-building targets issued to them by the government. If they fail to meet these targets, they stand to get penalised by the government. And since they source and buy the most strategic sites in every area, they have every reason to confidently believe that their sites will be allocated for development within the specified time-frame.

If you are interested to have some literature on their planners, RD planning and Land Consultants, please contact me on uklandadvisors@gmail.com

geetanjali

Hi Richard,

Would you personally recommend such an investment?

thanks

Geetu

richardnelson

Depends.

This investment cannot be treated as a real estate investment. This is rather a tool for the financial portfolio management.

Ideally, someone who has about 11-13 lacs to spare, can invest. He hasn’t much to lose, if the credential verifications are done of the promoters.

This is more like a pre-launch (in real estate) OR a pre IPO placement. If it clicks, there's returns, or else, the money depreciates in the mid term.

In the long run, such investments generally perform desired returns.

Also, lets not forget that the India realty investors have graduated to unhealthy multifold IRRs in the past, which situation, mat not remain for long.

We also would progress to more logical rates of return.

Hope this helps.

randeepramesh

Indians plough cash into false hopes of new homes on English Green Belt

Randeep Ramesh in New Delhi
Friday September 22, 2006
Source: The Guardian
http://money.guardian.co.uk/news_/st...878517,00.html

Plots of green belt land in England are being sold to Indians for thousands of pounds as one of the best ways to make money. They are being marketed on the basis that vast tracts of the English countryside would soon be covered in homes - and potentially make big profits for foreign investors.

Companies have taken out full-page advertisements in Indian newspapers and also blitzed prospective customers with text messages saying: "Plot available in UK London (sic)". Investing in England's green belt, according to marketing material seen by the Guardian, is "one of the best ways to create real personal wealth".

Landbanking firms typically buy fields for a few thousand pounds, divide them up, and then sell plots for £10,000 each on the basis that, with planning permission, they stand to reap substantial profits. However, local councils told the Guardian that "allowing homes to be built on the land would be contrary to all current, emerging and foreseeable planning policies".
In India, landbanking firms are largely unregulated, although some have been closed down. In London, the Financial Services Authority is concerned some schemes should be controlled because they are "collective investments".

None of this has deterred Indians, who have increasingly large amounts of disposable income thanks to the country's economic boom. They are told that the UK needs to build another 200,000 homes in the south east by 2016 to alleviate an impending housing crisis and some will have to be on green belt land.

One company, UK Land Investments Group, fills its sales material with quotes from John Prescott and photocopies of newspaper articles about why "the green belt has to go". It has offices in London, Dubai and Delhi, and is selling 5,000 acres (2,024 hectares) of green belt to Indians for $25,000 (£13,000) a plot, regardless of size, which is the maximum amount an Indian can send abroad without questions being asked.

One customer is Indian yarn trader Jinendra Jain, 65, who last visited Britain in 1979. He spent £24,000 this year on two small plots around Tunbridge Wells and Bromley, Kent. He reckons that his 600 square metres of England, once granted planning permission, could be worth £200,000. He signed up because of the prospect of big profits - more than 700% - and the fact that prices in India have almost tripled in metropolitan cities, with demand outstripping supply to the extent that the country is short of 25m homes. A luxury five-bedroom villa on the outskirts of Delhi sells for 42m rupees (£480,000).

"I already have eight properties here," he said from his office in Delhi. "In England, I am buying to build. I want a bungalow for my grandson."

However, Maidstone district council said his 350 square metres in Tunbridge Wells is in green belt land which is "an area liable to flood, it was highly unlikely any residential development could take place". His Bromley plot is also in the green belt. The council told the Guardian that "permission will not be given for inappropriate development. The construction of new buildings or extensions would be inappropriate".

"We are aware companies ...do advertise the 'hope' value. This is the first time we have become aware of land of this sort in the borough being marketed overseas," said Andrew Rogers of Bromley council.

Planners in the UK say it is "beyond belief" that English countryside sold to Indian investors would get built on. "The chances of developing green belt land to realise the gain are so slim they are frankly unbelievable," said Louise Brook-Smith, a planning consultant who has worked both in India and the UK.

Mr Jain says that he will shortly send his son to check the land's status.

Rajat Malhotra, an investment manager at UK Land Investments, denied that the company did not highlight the risks. "In India land is sold without any planning permission and by some method, permission is obtained. So in England, why would it be different? Our company will campaign to change the land's status. If not, we will help sell your property."

-- property mortgages

I would say that Randeeps article above has shed "realistic" light on things. The buyer needs to remember that these are speculative purchases that are driven by demand by the "hope" factor. This in turn means that the prices have gone up as a result. So although you need to be aware of the realistic situation of planning laws in the UK, the demand still drives up the prices.