More than 800 investors are suing London-listed Home REIT, alleging they were misled about the security of the social housing company's rental income, its financial strength and its stated social impact, their lawyer said on Thursday. Law firm Harcus Parker said the £120 million-plus lawsuit was lodged at London's High Court on Wednesday.
"Home REIT was presented to investors as offering financial returns while helping to tackle homelessness," said Harcus Parker partner Nate Barber. "Our case is that what investors were told did not reflect the reality." Home REIT declined to comment beyond a statement saying: "The company cannot comment any further at this stage and a further announcement will be made at the appropriate time."
Home REIT raised more than £850 million in three years, promising to buy property that would be let to publicly funded charities and community groups to house vulnerable people, while producing rental income. Its share price plunged in 2022 after activist Viceroy Research raised concerns about its tenants, rental income, property transactions and valuation. Home REIT, whose shares were suspended for three years, said at the time that the allegations were "without substance".
The company also faces a £300 million fraud and bribery investigation. The UK Serious Fraud Office opened an investigation into suspected fraud and bribery in January, and six people were arrested in Britain and Italy. The Financial Conduct Authority opened its own investigation in 2024, the company has said.
Its property portfolio has since been sold and its four wholly-owned subsidiaries are in liquidation. Home REIT says on its website that it is in a managed wind-down. In April, its listing was restored and properties sold. It has forecast significant costs defending the company and former directors from potential shareholder-related litigation.
The case is one of the largest investor actions seen in the London market in recent years and a stark illustration of how an investment proposition built on social purpose can unravel. For the 800-plus investors - many of them drawn by the promise of doing good while earning returns - the lawsuit is a last attempt to recover losses from a company that has become a byword for governance failure in UK social housing finance.
Home REIT's rise and fall has become a case study in the dangers of impact investing done badly. The company tapped into huge investor appetite for assets promising both returns and social good, raising more than £850 million in just three years. Its collapse has chilled the market for social-housing investment trusts and left regulators facing questions about how a listed company could unravel so spectacularly while under the watch of the FCA and its own auditors.