Claims Over Social Housing and
Affordable Housing Investment Losses

Concerns have been raised publicly about several businesses operating in this area. In October 2024, consumer group Which? looked at social housing investment promotions and reported that Alderley Group 2019 was offering up to 17% annual returns through loan notes. It also reported that CityGate Housing Limited was offering returns of 20% a year for three years.

Which? also reported that Alderley Group 2019 referred to Homes England as a partner on its website, but Homes England denied that it was a partner. Homes England is the government agency responsible for housing and regeneration in England.

Separately, City of London Police’s Economic Crime Department is investigating CityGate Housing Ltd and Social Housing Holdings Ltd under Operation Lily. Police have said that the companies are believed to have offered investment opportunities within the social housing sector. They have also said that four directors have been arrested on suspicion of fraud and money laundering offences as part of the ongoing investigation.

Companies House records show that CityGate Housing Ltd is in compulsory liquidation, with winding up having commenced in June 2025.

For investors, the key question may now be whether there is any way to recover money from these schemes. That may depend on how the investment was promoted, how it was paid for, and whether a regulated adviser, pension provider, SIPP operator, bank, professional firm, or other party was involved.

Social housing and affordable housing investment schemes are often promoted as a way to support housing projects while receiving a fixed financial return.

Some schemes involve loan notes or mini bonds. In simple terms, this means an investor lends money to a company in return for a promise that the money will be repaid with interest at a later date.

Other schemes may be structured around temporary accommodation, supported living, rent-to-rent arrangements, or property units said to be linked to demand from local authorities, housing associations, or care providers.

Marketing materials can sound reassuring and may refer to the housing crisis, vulnerable people, public sector demand, ethical investment, long leases, fixed returns, or security over property. However, investors should be careful not to assume that an investment is low risk simply because it is linked to social or affordable housing. The underlying product may still be complex, unregulated, difficult to sell and dependent on the success of the company or project.

Not every failed investment is a scam, and not every investor will have a valid claim. However, certain features may justify closer review.

These include:

• unusually high fixed returns
• claims that an investment was secure or guaranteed
• references to government or local authority connections without clear evidence
• pressure to invest quickly
• poor explanations of how returns would be generated

There may also be concern where investors were not told how much of their money would be used for marketing, fees or commissions, or where they had limited information about what would happen if the company defaulted.

These issues matter because they may help determine whether an investor was properly informed about risk, whether the investment was suitable, and whether any regulated or professional firm failed to carry out appropriate checks.

The Financial Conduct Authority (FCA) is the UK’s financial regulator. It regulates financial services firms and markets, sets standards for authorised firms and can take action where firms fail to meet those standards.

The FCA has warned consumers about high-risk investments from unregulated firms, including unlisted loan notes and mini bonds. These products are often used to finance property developments and can carry a high risk of investors losing all of their money.

Some property-backed investment schemes may also amount to an unregulated collective investment scheme (UCIS). A UCIS is a collective investment scheme that is not authorised or recognised by the FCA and is not subject to the same rules that apply to authorised schemes. Where investors’ money is pooled and managed by others, this can be an important issue in assessing how the scheme was promoted and whether ordinary retail investors should have been exposed to it.

High promised returns should usually be treated with caution. If an investment offers returns far above those of mainstream savings or investment products, investors should ask why. Higher returns usually mean higher risk and if it sounds too good to be true, it probably is.

Where the company offering the investment is not regulated by the FCA, investors may have fewer direct protections. They may not be able to complain to the Financial Ombudsman Service (FOS) about the unregulated company itself. FOS is the government-backed, independent body that helps resolve complaints between consumers and regulated financial businesses.

Investors may also be unable to claim directly through the Financial Services Compensation Scheme (FSCS) against the unregulated investment company. The FSCS is the UK’s compensation scheme for customers of authorised financial services firms that have failed.

Not every investor is without options: the available route will depend on how the investment was introduced, who was involved, how payment was made, and whether any regulated adviser, pension provider, SIPP operator, bank, or other professional firm played a role.

Some investors in social housing, affordable housing, temporary accommodation or supported living schemes may have a potential claim, depending on the circumstances.

The first step is usually to establish who was involved. If the investment was introduced by a third party, recommended by a regulated financial adviser, accepted into a SIPP or paid for through a bank transfer, those details may affect the options available.

If a regulated adviser recommended the investment, there may be questions about whether it was suitable, whether the risks were properly explained and whether the investor’s circumstances were taken into account.

Where pension money was used, the role of any SIPP provider or pension intermediary may also need to be considered. These cases can involve questions about due diligence, the type of investment accepted into the pension wrapper and whether proper checks were carried out before investor money was transferred.

Bank transfer payments may also need to be reviewed. Authorised push payment fraud (APP Fraud) usually involves someone being tricked into sending money from their own bank account to another account. If an investor was persuaded to transfer money as part of a misleading or fraudulent investment opportunity, there may be a possible APP fraud or bank negligence claim.

In some cases, recovery options may go beyond a refund complaint. Depending on the evidence, civil recovery action and/or private prosecution may also be explored.

The key point is that investors should not assume there is no route to recovery simply because the company itself is unregulated, insolvent or no longer paying returns. The important question is whether another regulated business, professional adviser, bank or other party had responsibilities that may have been breached.

If you invested in Alderley Group, CityGate Housing, Social Housing Holdings or another social housing, affordable housing, temporary accommodation or supported living investment scheme, it is important to get advice as soon as possible. Our team can review the circumstances and explain whether you may have a possible claim.

The options available may depend on what you were told, who introduced the investment, whether financial advice was given, whether pension money was used, how payment was made and whether any regulated business was involved.

Sarah Spruce, Partner at TLW Solicitors, said:

“Investments linked to social housing or affordable housing can sound reassuring because they are often promoted using language around community benefit, housing need and fixed returns.

The difficulty for investors is that the underlying product may still be high risk. Loan notes, mini bonds and unregulated property investments can be complex, illiquid and unsuitable for many ordinary retail investors, particularly where pension money or life savings are involved.

If payments have stopped, or investors are struggling to recover their capital, please get in touch with our experienced team who can look at what recovery options are available in your case.”