Frequently Asked Questions

Naturally, you will have questions if you are considering investing in Scala land. Here are some of the most frequently asked. However, if your question is not answered below then please contact us here

What does a typical investment in land cost ?
That depends very much on the location and the size of the plot concerned. A town centre site with potential for substantial homes is worth more than a semi-rural site suitable for smaller homes. It’s not possible to give an average price – each land parcel is priced according to its acquisition cost, and the number of plots it contains. Individual site details will make clear the actual price. However, entry prices to land investment are much lower than for other forms of property investment, like buy-to-let. This allows our clients to start small, and grow a portfolio quickly, without borrowing too highly.
Top

How can I finance a plot purchase ?
You are purchasing land, for which you’ll receive title deeds, so it is like any other form of property purchase. You can buy from existing funds, or with a loan, probably a mortgage. One interesting possibility is to invest in land through, a SIPP, or self invested personal pension. This is a tax-efficient way to invest in land and you should discuss it with your financial adviser if it might be applicable to you.
Top

Do I face any costs apart from the purchase price ?

Yes. You will have to pay legal fees. In addition, it would be sensible for you to insure yourself against third party liability arising from your ownership of the plot. We can suggest insurers interested in this business if your regular insurer cannot help you.
Top

Can Scala help me with reselling my plot ?
We may be able to, if we have other clients who wish to get onto that site.
Top

Can I use the land, while it is awaiting development ?
Yes. Within the existing planning category for the land you can use it how you wish. Its existing planning category may impose limitations on what you can do with the land, and these will vary from site to site. Another covenant you agree to when buying a plot from Scala is not to do anything with the land which would adversely affect its value. You should also consider whether making use of the land will affect its rateable value, and increase any local taxes you are liable for.
Top

Can I apply for planning permission to build a property of my own on the site ?
Yes, although you should be aware that a planning application in relation to a single plot is unlikely to be successful. Please note that legislation precludes Scala from applying for planning permission on your behalf (either in relation to your plot or the site as a whole).
Top

How does Scala make its profits ?

When we divide up a site to resell to our clients, we retain a considerable proportion of it for ourselves. This includes those parts of the site that will not be building plots, such as access roads, landscape areas, etc. This allows us to apply for planning permission on the parts that we own.
Top

Can I buy more than one plot on a site ?

You can, but our advice would be not to. We suggest you as a land investor buy further plots on different sites. That way, you are spreading your risk. With a geographically spread portfolio of plots, you can expect a more consistent revenue stream from site sales.
Top

How many sites do you have and where are they situated ?
The number of sites fluctuates continually depending on acquisitions and disposals. Contact us to find out what sites are currently available.

Top

What security do I have if I buy land from you?
When we identify a suitable parcel of land, we buy it in Scala’s name. We then offer individual plots of land to our clients. If they choose to participate, they buy that plot from us. That is a straightforward land transaction like any other and you end up with full ownership of that piece of land.

We strongly suggest you employ a solicitor or conveyancer to process the transaction for you. If you do not have a solicitor we can suggest one familiar with the land in question who will be able to help. That solicitor will carry out the usual safeguarding activity (searches, etc) on your behalf.

When the purchase goes through, it is notified to the Land Registry which provides you with title deeds proving your ownership. From that point on, you are the registered owner of that plot of land, and it is yours to do with as you wish, subject only to any conditions (covenants) which are included in the terms of sale, and to local planning, zoning and usage conditions.

Top

Are your sites on Green Belt land ?

Not usually, but some may be. Green Belt used to be regarded as sacrosanct, and unavailable for development. However, that attitude has changed, especially where small parcels of land in or close to existing residential property are concerned. Government plans for greatly increased numbers of new homes mean that some Green Belt land is likely to be used for housing. Where we select sites on Green Belt land, we bear all of this in mind in deciding whether or not it might be redesignated for development purposes. Only if it looks likely that the site will be redesignated for development purposes will we acquire and offer Green Belt land.
Times Article – Brown’s economist calls for homes to be built on Green Belt land

Top

Isn’t brownfield land preferred for development by this government ?
Yes, but it is widely recognised that there is insufficient brownfield land available for the proposed levels of new home building that the government is calling for. The current target is for 60% of new development to be on brownfield, but there are industry concerns whether 60% is achievable. Even if it is, that still implies that 40% of 3 million new homes (1.2 million) homes will be built on greenfield sites.

Guardian article – Homes plan ‘needs green belt land’

Top

Does Scala offer brownfield land ?
No. We don’t offer brownfield sites, because the risk and the return associated with them doesn’t suit our clients. Brownfield can cost a lot to prepare for residential development. Demolition and clearance may be needed. The land – especially if a site has been used for industry – can be polluted with toxic chemicals and will need decontamination or capping before building can start. Often, brownfield sites are not in the most attractive parts of a town or city – not many people want to live in the middle of an industrial estate for example – so there are major marketing costs to be met by a developer. Factors like those mean that brownfield sites can’t, from an investor’s point of view, just be bought, held, then sold with planning permission. The land investor has to finance a lot of expenditure to prepare the land, or has to sell it at a discount to its end value, so that the developer can afford the preparation costs.

That’s why Scala offers you greenfield land, where getting into and out of the investment only requires money to be spent on the planning process.
Top

What is involved in getting planning permission ?

In essence the process is simple, but in reality it can be very complex. Scala seek planning permission for the land it owns on its sites. When our customers want to apply for permission themselves, they are best advised to use a planning or architectural specialist who understands the planning process to do it for them. There is no reason that our customers can’t use the same architects and planners that we do, but for regulatory reasons we are unable to submit a joint application with our customers or collectively on their behalf.
Top

Is it necessary for me to get planning permission to benefit ?

No. When planning permission has been granted for one part of the site, it may be possible to market another plot on the site to a developer, without planning permission. Developers may be prepared to pay a premium for the plots, on the basis that they anticipate getting planning permission themselves. Even without planning permission, the value of greenfield land tends to rise long-term.
Top

Warning

Except where stated as otherwise, the source of all information is Scala Land Limited as at August 2007.

Scala Land Limited is not authorised or regulated by the Financial Services Authority. Scala Land Limited is not obliged to and will not apply for planning permission in relation to any land it sells nor will it provide any services to plot owners collectively following their purchase of plots.

A purchase of land is unregulated and should only be considered by those who are comfortable making their own investment decisions. Past performance is not a guide to the future.

The value of land (and any income from it) may go down as well as up and our clients may not get back the original amount invested.

Where monies are invested in land, you may not be able to realise your investment when you want because your land may not always be readily saleable.

You should also bear in mind that the valuation of land is generally a matter of the valuer’s opinion rather than fact.

The future returns and opinions expressed are based upon Scala Land Limited’s internal forecasts and should not be relied upon as indicating any guarantee of return for any investment in land.

The future rates and basis of tax may change. Private investors should seek professional advice before making an investment in relation to land.

Top