Home REIT set to pay off Scottish Widows debt in step toward closure

Scandal-hit homeless housing investor Home REIT said it was on the cusp of paying off its debts to Scottish Widows this morning after offloading swathes of its property portfolio at cut prices this year.

In an update to the market today, the former FTSE 250 firm said it had sold another 11 per cent of its remaining housing for £26.8m over the past two days, in a move which will clear the way for the company’s closure.

After the deals have gone through, Home REIT said it would have sufficient cash to pay off the remaining £72m it owes to Scottish Widows.

Home REIT was set up on the promise of housing the homeless while delivering a steady index-linked rental income for investors.

However, it has been embroiled in two years of crisis following a report from short-seller Viceroy Research, which sounded the alarm on its shaky tenant base and housing portfolio.

Since then, a slew of charities that rented its properties have gone bankrupt, and the Financial Conduct Authority has launched a probe into the firm. 

Serious Fraud Officials have also been probing the company this year, City AM revealed earlier this year. The SFO has said it does not confirm or deny investigations.

Despite calling in a new investment manager last August, Home REIT announced it would enter a managed wind-down earlier this year and offload the entirety of its portfolio to pay off its debts.

Since August 2023, it has now completed on the sale of 1,229 properties and exchanged on a further 415 properties, the firm told the market today. 

It has raised around £243.3m after selling the housing in line with valuations drawn up by property firm Jones Lang LaSalle last year, implying a near-60 per cent fall from the price Home REIT once claimed its housing was worth.

Shareholders in the firm gave the green-light for the plans to close the firm earlier this year. Several investors are suing the company over claims they were misled by its management.