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Vistry Expects £30m Loss After Discounting Unsold Homes

Vistry Group, one of the UK’s largest housebuilders, has announced it expects to make a £30 million loss in the first half of the year after applying significant discounts to clear unsold housing stock. The company’s shares fell by 8% following the announcement, which also included news of its finance director’s departure.

At the start of the year, Vistry held £600 million worth of unsold private homes, which it has reduced to less than £300 million through discounting strategies. The average discount offered to private buyers reached 7.1%, compared to 1.4% in the first half of the previous year. The company attributed these losses to weak consumer demand and lower confidence, citing uncertainty related to the Middle East conflict and rising mortgage rates following higher inflation.

Adam Daniels, who became chief executive three months ago, has overseen the price cuts to address inventory levels. Vistry stated that £190 million of the stock reduction will complete between now and December. The company noted that after a positive start to the year, market conditions worsened in the second quarter, and it does not anticipate a significant change in open market conditions in the second half of the year or in early 2027.

Cost-Cutting and Workforce Changes

Vistry is aiming to reduce its annual cost base by £25 million through voluntary redundancies and selective hiring. Less than 5% of its 4,400 employees have applied for redundancy so far. Chief financial officer Tim Lawlor will leave in October after four years with the company to take up a similar role in a different sector.

Focus on Social Housing and Market Challenges

In recent years, Vistry has shifted its focus towards building social homes in partnership with housing associations, local authorities, and build-to-rent investors. The company is currently negotiating new framework deals with 10 of its main partners. Concerns remain over the timing of state funding under Labour’s £39 billion social and affordable housing programme.

Vistry and its Countryside Partnerships division are among large housebuilders facing a multibillion-pound class action lawsuit over allegations of price collusion affecting homebuyers. The company’s share price has lost almost two-thirds of its value over the past year. Vistry rebranded from Bovis, acquired Galliford Try’s housebuilding division in 2020, and purchased Countryside in 2022.

The results highlight ongoing challenges in the UK housing market, where demand-side pressures continue to affect major housebuilders despite a widely acknowledged housing shortage.