Land banking investment scams

Find out how land banking investments work, how to avoid scams and what to do if you’re scammed.

First published: 09/08/2017 Last updated: 20/03/2023 See all updates

Land banking companies divide land into smaller plots to sell to investors, with the expectation it will rise in value once it’s available for development. But the land is often in areas of natural beauty or historical interest, with little chance of it being built on.

How landing banking scams work

Investors are usually called out of the blue, but contact can also come by email, post, word of mouth or at a seminar or exhibition.

Investors are told they will make big profits on small plots of land once planning permission is granted or development started.
But permission is often not granted or even applied for, and investors are left with land that is practically worthless.

While not all land banking schemes are a scam, it is often not made clear that there are restrictions on the development of the land or that it is protected.

There are also follow-up scams where plot-holders are asked to pay more money to settle their holding once they realise they will never turn a profit.

Scammers also target people searching for investments online through search engines like Google and Bing. They may offer high returns to tempt you into investing, but some may also offer more realistic offers to appear more legitimate.

If you are offered an investment opportunity through a search engine, they may not be regulated or authorised by us. You can check the FCA Warning List for firms to avoid. 

How to protect yourself

Land investments are not regulated by the FCA. This means you won’t have access to the Financial Ombudsman Service or Financial Services Compensation Scheme (FSCS) if things go wrong.

If you’re considering buying land, we strongly recommend contacting the local council where the land is located and asking them when the land will be released for development.

Just because the person promoting or operating the scheme says it’s guaranteed the land will be developed does not necessarily mean it will be.

These schemes usually have small print stating that the success of the investment is subject to planning permission being granted – so you’re unlikely to get any of your money back. 

You should only deal with financial services firms that are authorised by us. Check our Financial Services Register to find out if a firm is authorised. If you can’t find a firm on the FS Register, call us on 0800 111 6768.  


Always be wary if you’re contacted out of the blue, pressured to invest quickly or promised returns that sound too good to be true.

If you're contacted unexpectedly by a financial business or individual, make sure you reply using the contact details on the FS Register

Find out more on how to protect yourself from scams.

You should seriously consider getting financial advice or guidance before investing. MoneyHelper has information on how to find a financial adviser and our InvestSmart pages will help you make better investment decisions. 

If the scheme is a collective investment scheme

While we don’t regulate the sale of land, we do regulate collective investment schemes (CIS) – and a firm must be authorised by us to promote or operate a CIS in the UK.

We can only take action over a land banking scheme when it is being promoted or operated as a CIS without our authorisation.
It is possible to sell plots of land without the scheme being a CIS, so many land banking schemes are set up to avoid looking like one on paper.

Determining whether a scheme is a CIS is often a complex legal matter. Broadly speaking, the characteristics include:

  1. investors don’t have day-to-day control over managing their plot
  2. the scheme involves pooling investor funds
  3. the operator is responsible for managing the scheme as a whole

In these cases, we may be able to refer it to Trading Standards, the Corporate Complaints Team at the Department for Business, Energy, Industrial Strategy (BEIS) or the police.

If you've been scammed

If you’re worried about a potential scam or you think you may have been contacted by a fraudster, report it to us. Call us on 0800 111 6768 or use our contact form.  

If you’ve already invested in a scam, fraudsters may try and target you again or sell your details to other criminals.

The follow-up scam may be completely separate or related to the previous fraud, such as an offer to get your money back or to buy back the investment after you pay a fee.

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