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if they let nominet know in advance.. and if they are just buying and selling names and not catching or using dac related services then they are fine (to my knowledge)
That is one issue (of many) but the same end result can be achieved without any rule breaking.
But yes, as outlined above it would probably fall foul of http://www.nic.uk/disputes/terms/anti-avoidance/ and going by previous complaints by the domainer 'community' it would result in a fair bit of hassle called by the sheriff of nottingham and his motely crew against robin hood.
As I have mentioned to Julian this is one area I have been working on, currently lining up something along those lines for people with £10k+ , 3 year view and looking for (hopefully) alot better returns than bank/shares.