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Home REIT faces legal claim from financial advisors over alleged £1.6m unpaid debt
Home REIT has entered a dispute with its financial advisors over an alleged unpaid debt of more than £1.6m following the sale of its properties earlier this year.
Home REIT faces legal claim from financial advisors over alleged £1.6m unpaid debt #UKhousingIn an update published on 24 July, the beleaguered investment trust, which provides accommodation for people experiencing homelessness, revealed it is in a commercial dispute with Smith Square Partners LLP.
The financial advisory firm was appointed by Home REIT in early 2023 to advise on strategic options, including the sale of its assets, following the suspension of its shares.
Home REIT said the firm has this week issued proceedings “regarding a purported unpaid contractual debt” amounting to £1.62m together with contractual interest.
The claim alleges that Home REIT’s update to the market in November 2025, confirming press speculation that it was in talks to sell its portfolio for £123m, triggered a “tail fee” payable within the 24-month period following the end of Smith Square’s appointment in November 2023.
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A tail fee is a contractual clause that ensures financial advisors get paid their success fee if a deal closes shortly after the contract ends.
“The company intends to vigorously defend the claim,” Home REIT said in its update to the market.
Smith Square Partners has been contacted for comment.
Earlier this year, Home REIT – which is the subject of an investigation by the Serious Fraud Office (SFO) – completed the sale of 706 of its properties to Patron Capital for £123m.
An update at the start of July stated that there are four properties remaining in Home REIT’s portfolio, following rounds of auctioning throughout the year.
But the company warned that its ability to distribute proceeds from the sales to shareholders “continues to be curtailed due to threatened shareholder litigation”.
Since 2024, the investment trust has been in the process of winding down and has targeted the sale of all its assets to pay off its debt.
Its interim results for the six-month period to 28 February 2026 revealed a loss before tax of £18m.
Home REIT, which floated on the London Stock Exchange in 2020, was rocked by problems after financial research group Viceroy Research published a report raising doubts about its business model in 2022.
Among the issues raised was whether Home REIT’s clients would be able to service their leases on a long-term basis. The fund leased beds to charities to provide accommodation to people experiencing homelessness, but struggled to collect rents from some of its tenants, with multiple charity clients entering voluntary liquidation over recent years.
In 2023, Home REIT confirmed its properties were worth almost 60% less than the £977m it paid for them. The Financial Conduct Authority launched an investigation into the investment trust in February 2024.
Earlier this year, the SFO revealed a major operation involving raids and six arrests in connection with a suspected £300m fraud investigation of Home REIT.
SFO investigators, assisted by the National Crime Agency, carried out searches and made arrests at homes in Altrincham, Maidenhead and London, as well as a commercial site in Manchester.
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