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Vistry builds up profits as demand for affordable homes stays high

Housebuilder Vistry is on track to meet profit expectations (Vistry)
Housebuilder Vistry is on track to meet profit expectations (Vistry)

Housebuilder Vistry Group has said its affordable housing and rental sector work has partly cushioned it from the wider property slowdown.

The FTSE 250 firm’s chief executive Greg Fitzgerald gave the update as Vistry said it is on track to meet adjusted pre-tax profit expectations of £418 million for 2022, up 21% from a year earlier.

Traditional housebuilders are grappling with a number of headwinds that could impact sales, including a sharp rise in mortgage costs. Last year political uncertainty also knocked sentiment.

Vistry is not immune to the challenges, with forward sales of private homes at £1 billion at the end of 2022, down from £1.3 billion.

But the group last year completed a £1.1 billion acquisition of Countryside Partnerships, which significantly increased its affordable homes division. It has seen a “sustained level of demand” from housing associations, local authorities and the private rental sector that want to work with Vistry.

Fitzgerald said: “The combination with Countryside Partnerships in November provided a transformative opportunity for the group to accelerate its strategy of rapidly growing its high return, less cyclical revenues, and has firmly positioned Vistry as a leading provider of affordable homes.”

He added: “The group’s forward sales position totals an encouraging £4.6 billion and we have a strong pipeline of new opportunities within partnerships. It is too early in the current year to predict the outturn for private sales, however I remain cautiously optimistic that buyer sentiment will improve over the coming months.”

The group is working on a number of sites in London that have a target gross development value of around £700 million for 2024.

The shares improved 6p to 753p.