Lease-based temporary accommodation provider enters administration after ‘misfiled’ tax credit

The initial investment was intended to see Fiera Real Estate Long Income Fund let homes to local authorities on 20-year-plus leases for use as temporary accommodation or longer-term housing.

Fiera said councils would receive upgraded and refurbished housing without the need for a large capital commitment.

SimplyPhi has confirmed that no money was drawn down from this fund.

Fiera Real Estate did not respond to a request for comment. 

On its website, Simple Phi has a list of a number of local authority partners. Following news that the company has gone into administration, Thurrock Council issued the following statement.

Mark Hooper, cabinet member for health and well-being, which includes housing, said: “Like most councils, Thurrock has an eye-wateringly long list of local people waiting for a council home, with many more in desperate need of urgent help. It is my priority as cabinet member for housing to seize every opportunity to provide more homes for local residents.

“We have worked with Phi Capital over the last five years on a number of projects, which have resulted in the council acquiring 190 properties which are now being used to provide temporary accommodation and to help alleviate pressure on the council’s housing service. This is a huge achievement which has life-changing impacts on families and individuals in need.

“Phi Capital went into administration. The first we heard of this was when news emerged of an HMRC petition against the company for unpaid taxes. We were disappointed that as a client of Phi, we weren’t alerted to this in advance, and we have spent the last few weeks reviewing our arrangements with them to limit any impact of their situation on Thurrock.

“I am pleased to confirm that our review has concluded that the impact of Phi’s current situation will be negligible. We have paused all work with them and are actively working on plans to deliver the latest tranche of homes in a different way.”

As these homes are reliant on government funding with strict conditions attached, Thurrock Council confirmed it is now in discussion with the Ministry of Housing, Communities and Local Government “to find a positive way forward”.

Simply Phi said: “As a company we pride ourselves on the close working relationships we have with local authorities across the country delivering much-needed affordable, temporary and emergency housing to their residents. 

“We have delivered c.200 affordable homes to Thurrock Council over the last four years to help relieve homelessness and the financial pressures of temporary accommodation on the council.

“We can confirm that we have had to take the unfortunate decision to apply for Phi Capital Investments Limited to be placed into administration as a result of an HMRC tax credit misfiling, and not as a result of the underlying operational business.

“The administration process will facilitate the continuation of the business without disruption to clients as services will be provided by a new company with the skills and know-how to ensure delivery of services to our current clients.

“We had an agreement with Fiera Real Estate to use institutional capital to deliver affordable housing. Unfortunately, we were unable to secure a local authority partner due to limited leasing interest and as a result, no income fund was ultimately drawn from this allocation, and thus no affordable homes supplied.”

The lease-based model has been under scrutiny recently. Inside Housing has published several articles on funds looking to pay down debt and charity clients stopping rent payments.

In January, under-pressure investment trust Home REIT agreed to surrender the properties of another charity clients as it struggles to cope with debts and tackling ongoing legal challenges.