UK closes Home REIT probe without further action; shares rise 3.7%

Key Facts

Britain's Financial Conduct Authority has closed its investigation into property investment company Home REIT, with no further action planned against the company, Investment Week reported. Its shares rose 3.7% to 8.5 pence in the 21 October 2026 session, according to a QuotedData report dated the same day. The company was notified of the launch of the regulatory investigation on 7 February 2024, according to its half-year report filed with the regulator. The closure comes as the company proceeds with a shareholder-approved managed wind-down. The company also faces lawsuits that it warned in its financial disclosure entail substantial legal expenses and could restrict its ability to make distributions to shareholders.

In an ongoing criminal case, Britain's Serious Fraud Office announced on 14 January 2026 that it had opened an investigation into Home REIT's former management. The investigation concerns suspected fraud and bribery, with the SFO estimating the value of the suspected wrongdoing at about £300 million. Authorities arrested 6 people and searched 7 sites as part of the operation accompanying the investigation's announcement, according to the SFO's statement. Assets worth about £10 million were also frozen in connection with the case, according to the official investigation page. The searches extended to a home in Venice, where British investigators worked with Italian law enforcement authorities.

Home REIT raised more than £850 million during its first 3 years of trading, according to the Serious Fraud Office. The SFO said the model presented to investors involved buying and refurbishing properties before leasing them in bulk to organisations working in the social sector. Tenants included government-funded charities and community interest companies, according to the SFO's description. But the company previously announced that it had collected "only 23% of rents" due for the quarter ended in November, Reuters reported. The rent collection shortfall formed part of the backdrop to the company's crisis, while the investor lawsuit targets its statements about the security of its rental income.

More than 800 investors are suing the company, accusing it of misleading them about the security of its rental income, its financial strength and the stated social impact of its investments, according to Reuters. The lawsuit seeks more than £120 million, according to law firm Harcus Parker, which the agency cited for the size of the claim. The investors' allegations cover the company's portrayal of its financial strength, alongside promises linked to its social housing business. In a separate filing with the U.S. Securities and Exchange Commission, AlTi Global said regulatory investigations linked to the management of Home REIT and another fund examined whether false or misleading statements had been made. The filing added that those investigations also examined potential breaches of Britain's Financial Conduct Authority rules.

The investigations were preceded by a financial reporting crisis, with Home REIT's share listing suspended on 3 January 2023 after it delayed publishing its annual financial report. The company cited the suspension date in its annual report as part of its account of developments. Regulatory scrutiny also extended to the external auditor's work, Bloomberg Tax reported, citing Britain's Financial Reporting Council. The council said it was investigating BDO's audit of Home REIT's 2021 accounts. That investigation concerns the audit work, while the Serious Fraud Office investigation concerns the company's former management.

On returning money to shareholders, shareholders approved a new investment policy for a managed wind-down on 16 September 2024, according to the company's annual report. Home REIT subsequently announced the completion of the sale of 706 properties to Patron Capital, according to a filing with the Financial Conduct Authority. Net proceeds from the transaction totalled £119.2 million, according to the same filing. But the company warned in its half-year report that substantial legal expenses linked to shareholder lawsuits could restrict its ability to make distributions to them. The portfolio sale agreement includes a deferred payment of £25 million due on 1 April 2027.