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• Vistry Group has warned of lower annual profit and plans to slow house-building activity amid rising construction costs, weaker housing demand and economic uncertainty in the UK market.
• The company has paused share buybacks, tightened land acquisition plans and increased customer incentives to improve cash flow and reduce debt pressure.
• Despite reporting a 32% rise in year-to-date sales supported by incentives, Vistry said demand softened in recent months while material and labour costs continued to increase due to geopolitical tensions and inflationary pressure.
• The slowdown reflects wider challenges across the UK housing sector, with developers such as Berkeley Group, Barratt Redrow and Taylor Wimpey also reducing land approvals and expansion activity.
Britain’s largest affordable housing builder Vistry Group has warned that its annual profit is expected to decline this year as ongoing economic uncertainty and rising construction costs continue to impact the housing market in the UK. Advertisement
The company said it plans to slow the pace of house-building activity and introduce measures aimed at improving cash flow and lowering debt levels. These include pausing share buybacks, tightening land-buying criteria, slowing construction activity and offering higher incentives to support sales. According to the company, these steps are expected to significantly impact first-half earnings compared to previous years.
Vistry stated that its full-year adjusted profit before tax is expected to remain around the middle of analysts’ estimates ranging between GBP 168 million and GBP 283 million. This would mark a decline from the GBP 268.8 million profit reported last year.
The update came shortly after Adam Daniels took over as chief executive last month. Daniels has initiated a review of the company’s operations following several months of slower demand and concerns surrounding the group’s partner-funded business model. The findings of the review are expected to be released along with the company’s interim results in September.
Although Vistry reported that year-to-date sales increased by 32% due to sales incentives and support schemes, it said demand conditions had weakened in recent months. The company also highlighted that geopolitical tensions linked to the Iran conflict had started putting upward pressure on construction material costs and, to a smaller extent, labour expenses. It expects these pressures to continue during the second half of the year.
The company added that it is working with suppliers to reduce the impact of rising costs. It also expects demand from housing association partners and public-sector backed projects to improve later this year once funding allocations under Britain’s Affordable Homes Programme for 2026-2036 are confirmed during the third quarter.
The slowdown at Vistry reflects broader weakness across the UK housing sector. Major developers including Berkeley Group, Barratt Redrow and Taylor Wimpey have also reduced land approvals or slowed expansion plans amid pressure on profitability and concerns over buyer demand.
The housing sector in Britain has been facing a difficult operating environment over the past year due to high borrowing costs, inflation-led construction expenses and cautious buyer sentiment. Developers have also been dealing with margin pressure caused by higher energy prices and increased material costs across projects.
JPMorgan analyst Zaim Beekawa described Vistry’s latest business update as disappointing considering the scale of the implied downgrade in profit expectations. The analyst noted that market forecasts for the company had already been reduced sharply following its full-year earnings announcement released in March.
Shares of Vistry fell sharply after the announcement and touched their lowest level in more than 14 years, underperforming both sector peers and the broader market.
Source Reuters
5th Jun, 2025
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