I have a mate who is a fantasy property developer - that means his property developments are pure fantasy rather than being the stuff of fantasies! In private, he laughingly describes his developments as 'ghost towns. I had met him about 5 years after leaving university and he was up to his eyes in romance fraud, and making a fortune.
When we met up he already lived in a big house in a nice part of North London and had accumulated a wife and a couple of kids. His wife loved the bohemian lifestyle of the area, his kids went to a private Prep school and he 'worked from home' long before Covid made it popular. The house had been fully renovated by a team of Eastern European builders to a very high standard, and they were paid in cash. He had always been a diligent student (achieving a First as opposed to my own 2:1) and his 'work' ethic had not changed. He viewed scamming as a job and would walk upstairs to one of the rear bedrooms that now housed his 'home office' at 9am prompt every day.
This home office looked out over a garden that was over 75m long and 30m wide. The patio was filled with kids toys, a huge all weather sofa and chairs, a replica Hawaiian bar and a barbecue area that could feed a hungry rugby team. Unfortunately, the further you moved away from the patio, the worse it became. Within 15m the garden disappeared into a dense and impenetrable undergrowth.
His wife, whilst happy to turn a totally blind eye to the way in which he earned his money, was not completely stupid. She knew that in the fullness of time he would scam the wrong individual and retribution would come in the form of, (a) a visit by police who would seize everything - including the house - and her and the kids would be reduced to living in penury whilst her husband served 5+ years in prison, or (b) a visit by a vengeful relative of the victim who would take a crowbar to her husband's limbs. Either way, he was unlikely to be earning very much for quite a while. She needed to manage that risk.
Their house was already large enough, however, she was also painfully aware that getting their kids onto the housing ladder would be nigh on impossible by the time they are old enough to take on a mortgage. She had received a flyer through the door from a property developer who was offering to buy half their back garden, and she she could see why; there was ample room to accommodate another house at the far end. Access is via an established lane that contained other houses and garages. She spoke to her husband, who clearly had no interest in gardening, and she suggested that rather than sell half the garden to someone who would build a cheap house then sell it for a considerable profit, they should build something themselves and she would act as the Project Manager.
She did the necessary research with the Planning Office of the Local Authority and local estate agents and it seemed like a no-brainer. The value fell of his house was estimated to fall from £1m to £900k, with the smaller garden, however, once Planning Permission for a 3 bedroomed dormer bungalow was obtained the whole plot was valued at £1.3m without a brick being laid.
The two plots were legally separated and construction was contracted out to a local builder and a smart 3 bedroom dormer bungalow, also valued at £1m, now adorns the plot. Even taking into account the build costs and all fees, this still represents a clear profit of £500k+. A huge profit, a good investment and a home for his kids in later life. In the meantime it would generate a good income by being rented out.
One night whilst sitting on their patio sipping a very large gin and tonic he grudgingly praised his wife for her foresight. All builders had been paid largely in cash so it also proved an ideal way of laundering the money from his continuing romance fraud. The single thing that amazed him more than anything else was the massive increase in value once Planning Permission had been obtained. The cogs were beginning to turn.
Unsurprisingly, scammers don't use platforms such as Linkedin to network (at least not using their true identity!) but we all know friends of friends involved in different areas of scamming and this was no different. He got in touch with a guy whose area of expertise was Timeshare scams (see previous post Boiler Rooms) as there were more than a few similarities here, and between them they devised a scam that reaped (and continues to reap) them a fortune.
The scam was to buy fields from farmers just outside of a town - usually in the 'Green Belt', and ideally close to an 'A' road. Typically they paid a few hundred pounds per acre (an acre is roughly the size of a football pitch) They then subdivided the field up into generous house-sized plots and produced a glossy brochure and website proclaiming the unmissable opportunity to get in early an a fantastic investment. If customers bought a building plot now, they would see a massive increase in its value as soon as Planning Permission is obtained - which, apparently, is only a formality. To add extra authenticity, a number of the plots are already marked as sold. They work out of a plush portakabin, hire attractive sales teams and serve up glasses and glasses of ice-cold Prosecco to anyone who appears to be vaguely interested in buying a plot. They even employ a couple acting as recent buyers who have come back to buy further plots to optimise their investment. They engage prospective buyers in conversation to reassure them that this opportunity is too good to miss.
To support and validate their claims they include quotes from politicians bemoaning the chronic housing shortage and the ever increasing population of the UK. A plot bought for £20k now could be worth over £100k once Planning Permission has been obtained. They often also limit customers to a maximum of 3 plots, and by limiting the availability, they effectively increase the exclusivity and make the offer even more attractive in the eyes of someone trying to make a quick buck. If viewed objectively, the calculations involved are not unrealistic. As described above, a plot without Planning Permission could indeed increase substantially in value once it has been obtained.
However, wake up and smell the coffee! Planning permission is NEVER going to be obtained by them or anyone else. If Planning Permission was a realistic proposition, why would the farmer who owns the land not develop it themselves? Farmers are a canny bunch and are, in my experience, incredibly savvy. I can't see any of them passing up an opportunity to make such easy money.
Even if they had sold the land to a property developer, why on earth would that same developer decide to share their good fortune with random strangers rather than taking such huge profits for themselves???? The reality of the situation is that there is as much chance of Planning Permission being granted as there is of me being a contestant on Love Island - more likely a show entitled 'Love Handles'
Property is ordinarily one of the safest investments you can make. Homes Under the Hammer must have inspired thousands of people to make great investments to either live in themselves or sell on for a decent profit. Some have gone on to carve out careers as property developers, and whilst there are no guarantees, as long as you do your homework, the chances of you making a catastrophic loss are small.
Anyone who tries to sell you one of these ploys will undoubtedly gloss over the fact (1) they cannot guarantee Planning Permission will be granted now or at any point in the future, (2) any attempt to obtain a refund will incur an administration fee of up to 50% of their original investment and the remainder must be reinvested in another similar scheme, and (3) they can obtain independent specialist advice if they wish.