The Serious Fraud Office (SFO) has launched a major crackdown on a suspected multimillion-pound fraud at a listed social housing fund, arresting six individuals and executing raids across the UK and Italy.
Widespread Raids and Arrests in Connection with Home Reit
In a coordinated operation, SFO investigators, supported by the National Crime Agency, carried out searches at residential addresses in Altrincham, Maidenhead, and London. A commercial property in Manchester was also targeted. In a significant international move, a further raid was conducted at a location in Venice with the assistance of Italy's Guardia di Finanza.
The agency estimates the scale of "suspected offending" at Home Reit to be around £300 million. The six people arrested are being questioned in connection with suspected bribery and fraud related to the fund's operations.
The Meteoric Rise and Chaotic Fall of a Social Housing Giant
Home Reit was established with lofty ambitions in 2020, listing on the London Stock Exchange as the first property fund of its kind dedicated to tackling homelessness. Its goal was to grow into a £1 billion business and help take 10,000 people off the streets.
The fund successfully raised £850 million from investors, using the capital to purchase and refurbish properties. These homes were then leased to publicly funded charities, which would house vulnerable groups including rough sleepers, veterans, and people battling addiction. Investor returns were intended to be generated from the rental income.
However, the model began to unravel as charities, including the Noble Tree Foundation, started withholding rent payments, citing the provision of substandard accommodation. Reports emerged of properties plagued by issues such as black mould and leaking ceilings.
Investors and Vulnerable Tenants Left Seeking Answers
The company's troubles were exacerbated by a critical report from short-seller Viceroy Research. Trading in Home Reit shares was suspended by the London Stock Exchange in January 2023, by which time the company's market value had collapsed by more than 70%.
Ellie Reeves, the Solicitor General, stated: "The allegations in this case are deeply serious. Vulnerable people, including rough sleepers and veterans, were promised homes, while investors who funded millions of pounds were promised returns. Both groups deserve answers."
Emma Luxton, the SFO's Director of Operations, commented on the stark contrast between the fund's promise and its demise: "This company had a meteoric rise, spending millions on properties that were supposed to house the most vulnerable in society and provide returns for investors. Its chaotic downfall has left many with unanswered questions."
Home Reit, which has stated it is undergoing a "managed wind-down", has been approached for comment regarding the recent arrests and raids. The investigation remains ongoing.
