While the UK housing market faces numerous hurdles, Vistry Group is setting an ambitious goal to construct 17,500 homes in 2024. This decision comes at a time when many in the housebuilding sector are grappling with reduced demand, soaring material costs, and higher mortgage rates.
Vistry, a leading property developer, has announced a significant increase in its housebuilding plans for the year, aiming to deliver 17,500 homes. This marks a noticeable uptick from the 16,118 homes it completed in the previous year. The move is powered by the thriving demand for its affordable housing segment, demonstrating the company’s resilience and strategic focus in challenging times.
Merging Divisions for Greater Impact
In a strategic shift last September, Vistry decided to merge its housebuilding division with its partnerships business. This merger aims to address the pressing issue of affordable housing shortage in the UK. Vistry’s partnership model, which involves collaborations with registered providers, local authorities, and the private rented sector, now represents two-thirds of its sales. This approach not only diversifies its portfolio but also strengthens its commitment to building sustainable communities and high-quality homes that people aspire to live in.
A Unique Position in the Market
Greg Fitzgerald, Vistry’s Chief Executive, emphasised the company’s dedication to creating new homes and communities across the country, “As a leading Partnerships business, the group is committed to creating quality new homes through the development of sustainable new communities and places people love. We see high demand for mixed tenure housing and regeneration across the country and are uniquely placed to deliver on this market opportunity, helping address the country’s acute need for housing.”
Financial Resilience Amidst Sectoral Slowdown
Despite a challenging environment marked by a slowdown in demand, rising mortgage rates, and increased costs for materials and labor, Vistry has shown remarkable financial performance. The company reported an adjusted pre-tax profit of £419 million in 2023, slightly up from the previous year and surpassing analyst expectations. This contrasts sharply with its rivals, Persimmon and Taylor Wimpey, who have faced significant profit declines and are scaling back their construction plans.
Challenges in the Construction Sector
The broader construction sector experienced a downturn last year, with a reduction in the number of new homes built and sold. Industry reports indicated a significant drop in construction contracts and a particular slump in residential housebuilding deals. Despite these obstacles, Vistry’s partnership model has provided a cushion against market fluctuations, garnering praise from industry analysts for its efficiency and the company’s agility in adapting to these conditions.