Home REIT's 2025 Annual Report Shows Deepening Losses Amid SFO Investigation and Portfolio Wind-Down

Home REIT 2025 results: deeper loss, lower NAV, and a portfolio in managed wind-down

Home REIT has published its Annual Report for the year to 31 August 2025 and, in short, the clean-up continues. The company remains in a managed wind-down – selling assets and aiming to return capital – while dealing with investigations and potential litigation. Losses have widened, the NAV per share has fallen again, but the balance sheet is now free of bank debt and sales are progressing.

Chair Michael O’Donnell stresses the Board’s focus on the best possible outcome for shareholders and highlights “significant progress” with AEW, including entering exclusivity with Patron Capital for a bulk sale of the majority of the portfolio. The catch: litigation risk and regulatory investigations could constrain and delay any return of capital.

Headline numbers investors need to know

Portfolio valuation (31 Aug 2025)	£154.9 million
Portfolio valuation (2024)	£265.4 million
Properties sold during the year	522 properties for £97.0 million (gross)
Like-for-like valuation movement on remaining assets	£11.0 million decrease
Loss before tax	£30.6 million (2024: £25.2 million loss)
NAV per share (31 Aug 2025)	20.38 pence (down 16%; 2024: 24.25 pence)
Unrestricted cash	£9.6 million (2024: £6.2 million)
Debt	All borrowings to Scottish Widows repaid, including interest and deferred fees of £9.0 million

Translation into plain English: the estate is smaller, values have slipped again, losses remain significant, but the company has more cash on hand and no lender over its shoulder.

Progress on portfolio disposals: Patron Capital exclusivity and auctions

As flagged on 13 November 2025, Home REIT is in exclusivity with Patron Capital for the sale of approximately 700 assets. Exclusivity means Patron has a period to negotiate on a sole basis; it is not a binding sale agreement.

There is no certainty a deal will be agreed – critical to remember. Meanwhile, the remaining properties – valued at £17.6 million in the 31 August 2025 balance sheet – are expected to be substantially sold via the auction market in the first half of 2026. AEW continues asset-level work on health and safety, compliance, tenant quality, rent collection and preparing units for sale.

Why it matters: a bulk sale could accelerate cash realisations and reduce ongoing operating costs. Auction disposals for the rump assets should tidy up the tail. However, pricing and completion risk remain live issues until contracts are signed and cash received.

Losses, valuations and what’s driving them

The £30.6 million loss before tax reflects three main factors set out by the company: general and administrative expenses, property-level operating costs, and a decrease in the fair value of property. On valuations, the company notes general residential market movements and an updated methodology for certain properties, which together drove a like-for-like fall of £11.0 million on the remaining portfolio (on top of the effect of the 522 disposals for £97.0 million).

NAV per share fell 16% to 20.38 pence, following an 11.6% decline in the prior year to 24.25 pence. For shareholders, NAV is the key yardstick in a wind-down – it is the notional equity value per share on the books, but it is still subject to realisation risk as assets are sold and costs, taxes and legal outcomes flow through.

Balance sheet cleanup: debt-free but cash-light

One clear positive: the group repaid all outstanding borrowings to Scottish Widows during the year, including associated interest and deferred fees of £9.0 million. That removes lender constraints and interest drag – useful in a realisation scenario.

On liquidity, unrestricted cash stood at £9.6 million at year-end. That is better than last year’s £6.2 million, but still a modest buffer given ongoing corporate and property running costs. The timing and proceeds of disposals will be important to keep the lights on without dilutive measures.

Litigation, SFO and FCA: the risk overhang explained

The company reiterates there have been no material changes in relation to potential shareholder group litigation, the FCA investigation or its own pursuit of legal action against those it believes may be liable for losses. On 14 January 2026, the Serious Fraud Office made arrests and raided properties related to people formerly associated with the company. Home REIT says it is assisting the SFO.

Why it matters: these processes are inherently slow and uncertain. They can restrict what the Board can distribute and when, particularly if the company needs to retain capital for legal costs and potential liabilities. The Board explicitly reminds shareholders that distributions may be constrained and could take place over a longer period than hoped.

Returns of capital: yes in principle, but patience required

The objective is still to return available capital to shareholders as soon as the realisation strategy completes. However, the Board is squarely hedging expectations: litigation risk, investigations and the need to retain funds for corporate costs and potential legal action mean both the quantum and timing are uncertain. The company is taking professional advice to do this in a way that is transparent, cost-effective and consistent with directors’ duties.

In short: treat any return of capital timetable as fluid. It will likely depend on the Patron Capital outcome, auction proceeds, ongoing costs and the legal landscape.

Suspended no more? Path to restoring the listing

Home REIT expects to file its 2025 interim accounts in the first quarter of 2026 and will then apply to the FCA for restoration of its listing and a resumption of trading on the London Stock Exchange once outstanding information is published. This is a necessary step to give shareholders liquidity, but the exact timing is not disclosed.

My take: the good, the bad and the next steps

• Positives: debt fully repaid; a credible route to asset sales via Patron and auctions; incremental cash build; continued asset management to support pricing.
• Negatives: deeper losses; another NAV drop to 20.38 pence; valuation pressure persists; no certainty on the flagship portfolio sale; and a heavy legal/regulatory overhang with potential group litigation and the SFO investigation.
• Reality check: even if the asset sales complete, a portion of proceeds is likely to be held back for costs and legal actions. Distributions could be staged and slower than many would like.

What to watch next

• Confirmation of a binding deal (or not) with Patron Capital for approximately 700 assets.
• Evidence of auction sales for the £17.6 million rump portfolio during H1 2026 and achieved pricing versus book.
• Publication of the 2025 interim accounts and the FCA’s decision on restoring the listing.
• Any updates on rent collection, compliance remediation and tenant/manager quality – all influential for sale proceeds.
• Developments in the SFO/FCA processes and the company’s own legal actions, which could affect cash retention needs.

Bottom line

Home REIT’s 2025 report shows a company still working through the consequences of its past model, but making operational progress on exits and cleaning up the balance sheet. The outcomes that matter – sale prices, legal exposure and the timing of distributions – remain uncertain. If you’re a shareholder, expect more updates through 2026 and be prepared for a staggered, potentially prolonged return of capital rather than a quick clean break.