I would echo the same concerns as qpqp. There are many pieces to the equation and the land plot company never tells you about more than one - the highly inflated future sale price.
The land plot company will try and convince you otherwise but the way the UK land plot companies make their money is by selling land to you. The huge increase in the value of this land has already taken place. It comes from people like you being willing to buy a normally useless land plot for a highly inflated price. Once the realisation kicks in that this land has no realistic chance of planning permission the market price will drop like a stone as people either unload it or abandon it.
If you dont believe this here are some key questions to ask.
1: What is the true value of the item you are buying today ? A better way to express this is if you had to sell it on the open market today or in 2 years time what price would you get for it if the value event expressed in item 3 below does not happen.
2: What purchase price are you paying - is it reasonable against the current true value ?
3: What event apart from time is going to increase the value of this item. (value event). Time increases in land value generally macth inflation without any other event.
4: What are the chances of the value event occuring and when is it expected to occur.
5: What will the net new value of the item be in real terms ( including inflation and currency changes and selling expenses) if the value event does occur. How does that new value compare with the current purchase price and current true value.
6: What happenes if the company you are buying from no longer exists when you want to sell your land ?
Apart from information provided by the UK land plot vendors and their agents the general consensus on their UK land plot investments is that they are highly overpriced against current true value. Also the chances of a positive value event occuring are very low. This is why they are able to buy the land so cheaply. The chances of it occurring are
estimated here as lower than the least likely bet on Roulette.
There is an
example given on Profitable Group concorde village site. A concorde village plot had a value of around S$800 (350 UKP) in 2006 when it was purchased by Profitable Plots. Current selling price without any change in curcumstances is around S$19000 (UKP 8000). All conversions at 2010 currency rates.
Profitable claim in
their 2008 TV advertising that this land will obtain 250% returns (S$46,000 ) by 2011.
There are numerous sources suggesting otherwise.
The UK Local Government Authority has made some very clear statements
here. The UK press has commented - examples are
here and
here. Even the Singapore press has commented
here.
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