There is immense value in learning from the mistakes of others. We consider it life experience leverage. There are many elements of the following story that we will not know and other parts we can only guess at. However, what is available in the public domain paints a very interesting picture and highlights some exceptional failings.

The recent implosion of Home REIT serves as a stark reminder of the importance of due diligence and strategic planning. The repercussions of this collapse extend beyond the immediate financial losses, offering critical lessons for investors navigating the complexities of property auctions and market dynamics. As property investors, understanding the factors leading to such failures can provide crucial insights, especially when these assets flood the auction market, as seen in recent Allsop Residential auctions.

Let us not forget that this is a human story, and the fallout of this will be negatively affecting pension funds, investors, registered care providers, tenants (the majority of which would be considered vulnerable), the buildings themselves, and the impact on the local communities where these properties are located.

As of Home REIT’s trading update on 1 November 2022, the trust had a portfolio of 11,796 bedrooms nationwide. This number gives you an idea of the size and scope of the REIT’s operation. However, the recent disclosures about the dilapidated state of many properties, like the demolished house in Lancashire, highlight severe operational and managerial failures.

A deep dive into systemic failures
Home REIT was established with the noble intention of creating a social housing portfolio to house some of the most vulnerable in society. This intention crumbled under the weight of its systemic flaws.