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Park First – The dangers of car parking space schemes

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There has been a lot of negative controversy in the media recently about investment schemes which offer the opportunity to purchase car parking spaces for rental at UK airports.

Airport parking schemes

These schemes have become increasingly prevalent in the wake of increased pension freedoms, which have provided those planning for their retirement with greater options with regards to how they invest their retirement savings.

Whilst many of these schemes look legitimate and indeed attractive in terms of the returns offered, they are often scams. As a result, people have lost huge sums of money.

Park First

Many companies like Park First have been seeking to get a slice of the lucrative airport parking market. They encourage investors to transfer their pension savings into the schemes. Investors are promised great returns from buying an airport car parking space.

Spaces are priced from £25,000 upwards. However, many operators often downplay the high service charges and maintenance costs. These fees could result in an investor spending as much as £45,000 for one space.

Rental incomes are often not as high as investors were led to believe. As a result, many face further problems down the line if they choose to sell due to a lack of interested buyers.

FCA clampdown

In December 2017, the Financial Conduct Authority (FCA) entered into discussions with Park First. The firm is promoting and operating airport car parking investment schemes.

Park First is part of the First Group. The firm has a number of storage pods schemes and is now the subject of a winding up order.

As a result of these discussions and the FCA’s concerns that Park First is not authorised to provide such services, Park First has agreed to stop operating their original scheme. They have now allowed investors the opportunity to get their money back or to move their investment into what they have called a Lifetime lease back scheme.

Under this new arrangement, they promise that members will receive a fixed annual rental income with no overheads. This is because Park First will take care of the promotion and maintenance of their car parking space.

The wider industry

The FCA’s view on airport car parking scheme investments is clear.

It said: “we took the view that these were collective investment schemes which can be high risk investments and only authorised firms and individuals can operate or promote them. Park First is not authorised by us and is not permitted to provide regulated financial services.”

Due to the prevalence of such car parking investment schemes the National Fraud Intelligence Bureau have warned: “a new commodity is being offered as an investment to members of the public.

This new commodity is parking spaces. The method used by those selling the parking space is very similar to that used by businesses selling unregulated investments. These include diamonds, wine and carbon credits.”

Investors have also warned that a major downside of investing in such unregulated investments is that investors have nowhere to go in terms of financial redress if things go wrong – but there are options!

Have you invested in a parking scheme and lost money as a result? At APJ we can help you to get compensation. Get in touch with our expert legal team today for a free consultation.