A growing number of companies are causing concern by selling small plots of land with the promise of huge returns if they get planning permission for housing.
By Sonia Rothwell
BBC Radio 4's Money Box
The government has said over 200,000 extra homes per year are needed for the next two decades to keep up with demand.
In areas like South East England, there is heavy pressure on local authorities to earmark even more sites for housing.
Even disused farms are being sold as land investment opportunities
And it is this fact that is giving land speculation companies their biggest selling point.
London-based UK Land Investments Limited (UKLI) is one of many recently established companies which buy land, sub-divide it and sell off the plots to small investors.
One site it is promoting is 25 acres of disused farmland near Slough which has been subdivided into 162 plots.
The site cost the company just over £1m and if it sells off all the plots, it stands to get a profit of around £2m, after costs.
It does not have planning permission but UKLI's planning director Derek Lawrence is confident it is ripe for development.
"We have got housing that is almost on three sides of the site, there is good access to a main route that links directly into Slough," he told BBC Radio 4's Money Box.
"I cannot really think of a more appropriate location that if one was saying 'which land should we release from the greenbelt?' there is an exceptionally good case that can be made for here."
Plots on this site big enough for one house sell for around £22,500.
The company has said investors could make a clean profit of just over £60,000 if the land is developed.
Harinder Dhaliwal and her husband bought two plots here and recently sold one.
"We bought the land for £22,500 and just in three months [it sold for] £24,000, so we made £1,500."
But Harinder only made that small profit by re-selling the plot through UKLI which also charged her £500 for the service.
The company is three years old but so far, none of its sites has attracted planning permission.
To get a major return from land, someone must want to develop a site and be prepared to buy it from investors at a high price. That is the big gamble.
In rural Oxfordshire, another company has been dividing up two fields into smaller plots to sell to investors, a move which has angered the local authority.
Tina Rowley, planning policy manager at West Oxfordshire District Council said:
"The only possible housing you would get on here is maybe a new farmhouse."
"But apart from that I cannot see any development potential on these two fields certainly for the next 20 years."
So there is a high risk that people could be wasting their money investing in land speculation.
Much depends on whether the site invested in will be earmarked for future development.
John Slaughter from the Home Builders Federation warns it is unlikely major builders will have overlooked sites that could realistically be developed.
He said there is another major hurdle that stands between investors and their profits: "It would not be attractive to our members to have to negotiate with 50 individual owners of sites in order to bring a development together.
"Generally, I do not think there would be any interest at all from a developer in acquiring land on that basis."
The plots UKLI is selling in Slough are in a greenbelt area, but the company said it is going to lobby the local council that it should be developed.
Intensive marketing here by similar companies has put the local council on the offensive.
It is stressing to potential investors that greenbelt land will remain greenbelt. It says what are being marketed as investment opportunities may not be.
Land investing is unregulated so there is little protection if anything goes wrong.
Although brochure headlines might seem to promise big returns, companies do not give guarantees in writing that their sites will ever be developed.
It is becoming such a concern that MPs are now calling for an investigation into land speculation.
Liberal Democrat MP for Leeds North-West Greg Mulholland has tabled a bill demanding the government looks into it.
"When you have a situation that everybody agrees is wrong, that is when you need legislation."
"The... people who are going to get rich are not the investors, it is the companies who are peddling the land in the first place."
The government has so far done little to address concerns about the issue.
The Office of the Deputy Prime Minister gave assurances in a statement to the programme that steps are now being taken.
For example, local councils are getting powers that mean even the tiniest development on one of these sites must have planning permission.
But it went on to stress that in the end it is up to investors to ensure they are not being mis-sold.
BBC Radio 4's Money Box was broadcast on Saturday, 6 May 2006, at 1204 BST and repeated on Sunday 7 May, at 2102 BST.