Six arrested in £300m fraud probe of UK housing investment trust
Britain's Serious Fraud Office has arrested six individuals as part of a major investigation into an alleged £300 million fraud scheme involving Home REIT, a former listed company that promised investors returns from social housing projects for vulnerable people. The arrests follow mounting concerns about the company's operations and property valuations that were first raised by short sellers in 2022.
Background and Context
Home REIT raised approximately £850 million from investors to finance a purported social housing mission: acquiring and renovating properties that would be rented to charities supporting homeless people, veterans, and individuals struggling with addiction. The company's business model promised both social impact and investor returns, but questions about its viability emerged in late 2022 when U.S.-based short sellers at Viceroy Research published a detailed report raising concerns about property valuations and tenant rent payments. The London Stock Exchange suspended trading in Home REIT shares in early 2023, and by 2024, the UK's Financial Conduct Authority had launched its own investigation into the company's business practices.
Key Figures and Entities
The Serious Fraud Office, led in this operation by Director of Operations Emma Luxton, conducted coordinated raids resulting in the arrest of six individuals connected to Home REIT's former management. According to an SFO press release, those arrested are suspected of involvement in fraud and bribery schemes. The investigation builds on earlier work by Viceroy Research, whose 2022 report first highlighted irregularities in the company's financial reporting. Meanwhile, the Financial Conduct Authority continues its separate investigation, though formal allegations have yet to be filed. A UK law firm is also preparing potential legal action on behalf of shareholders who claim they were misled by the company's prospectus and financial statements.
Legal and Financial Mechanisms
The alleged fraud scheme involved the systematic misrepresentation of property values and rental income streams that were supposed to generate returns for investors. According to investigators, Home REIT's management may have inflated property valuations while failing to secure reliable rental income from charity tenants—some of which reportedly lacked the financial capacity to pay market rates. The complex structure of the investment trust, combined with limited oversight of its social housing partnerships, allegedly created opportunities for financial misconduct. The company is currently in the process of being wound down, with administrators working to recover assets for investors.
International Implications and Policy Response
The Home REIT case highlights significant regulatory gaps in the oversight of ethical investment funds and social housing finance schemes. The company's ability to raise hundreds of millions from retail investors despite red flags about its business model has prompted questions about the adequacy of due diligence requirements for investment trusts. Regulators in the UK and internationally are reviewing frameworks for socially responsible investing, particularly where public policy goals like housing the vulnerable intersect with private capital markets. The case may influence upcoming reforms to the UK's investment trust regulations and could serve as a cautionary tale for the growing ESG investment sector.
Sources
This report draws on statements from the UK Serious Fraud Office, previous investigations by Viceroy Research, regulatory filings with the London Stock Exchange, and ongoing investigations by the Financial Conduct Authority. Information was also sourced from company announcements between 2022 and 2026.
