Editor's note: This brief was summarised by The Property AI Newsroom from a report by Guardian Property. Read the original article for full details.

Vistry Warns of Losses After Heavy Discounting on Unsold Homes

Vistry Group, one of the UK’s largest housebuilders, has announced it expects a £30 million loss before tax for the first half of the year. The company attributes this to weak consumer demand and heavy discounting on unsold homes.

Vistry reported that it began the year with £600 million worth of unsold private homes, but has reduced this figure to less than £300 million. Of this reduction, £190 million is expected to be realised as sales complete between now and December. The average discount offered to private buyers rose to 7.1%, compared to 1.4% in the first half of the previous year.

The company’s share price fell by 8% following the announcement, which also included news that its chief financial officer, Tim Lawlor, will leave in October. Adam Daniels, who has been chief executive for three months, has overseen price cuts to help move unsold stock.

Vistry stated that market conditions worsened in the second quarter of the year, citing increased uncertainty and lower customer confidence linked to the Middle East conflict. The company also noted that mortgage rates increased after higher inflation raised expectations of Bank of England interest rate rises, though concerns have eased recently.

Vistry has slowed or delayed building on some sites and is seeking to cut its annual costs by £25 million, including through voluntary redundancies. Less than 5% of its 4,400 employees have applied for redundancy so far.

In recent years, Vistry has shifted towards building social homes in partnership with housing associations, local authorities, and build-to-rent investors. The company is negotiating new framework deals with 10 main partners. There are concerns about the timing of state funding for these projects under Labour’s £39 billion social and affordable housing programme, with grants expected in the coming months.

After a series of profit warnings in 2024, mainly due to losses in its south division, Vistry has reorganised its operations. The company’s share price has lost almost two-thirds of its value over the past year.