Vistry says housing market slowdown persists and plans 200 job cuts

The housebuilder said it will cut hundreds of jobs as part of a restructuring that focuses on its affordable homes division.

Vistry has joined rival housebuilders in warning over weaker demand in the housing market as it prepares to cut around 200 jobs (Andrew Matthews/PA) (PA Wire)

Vistry has joined rival housebuilders in warning over weaker demand in the housing market as it prepares to shed around 200 jobs from the merger of two divisions.

The London-listed company said the need for affordable homes is continuing to boost that part of its business.

But earlier this year, the group revealed that it had seen a slowdown in private sales during the summer months due to higher mortgage borrowing costs and inflation squeezing household incomes.

We have not seen the seasonal increase in private sales since September that we had expected

Vistry

“This trend has continued and we have not seen the seasonal increase in private sales since September that we had expected,” Vistry said in an update to investors.

Net debt is predicted to be higher for the full year, at around £450 million, the group added.

The update comes after rival builders Bellway and Barratt Developments both warned over a slump in demand this month, having seen a drop in weekly reservations of new homes.

Last month, Vistry unveiled plans to merge its housebuilding division with its affordable homes business Partnerships, through which it works with local government authorities and housing associations to build lower-cost homes.

The restructuring is set to shave about £40 million off its full-year adjusted pre-tax profit, from £450 million to an expected £410 million, it said.

Furthermore, it will make about 200 roles redundant as it cuts the number of regional offices.

But it expects to make about £25 million in savings a year as a result of the merger, which it said will increase the building of “much-needed” affordable homes across the country.

Vistry previously acquired Countryside Partnerships for £1.27 billion, which resulted in around a 4% reduction in the number of full-time staff.

The Government is reportedly considering extending support for first-time buyers who have struggled to get on the housing ladder thanks to higher borrowing costs.

Chancellor Jeremy Hunt could extend an existing mortgage guarantee scheme which helps people take out a loan with a 5% deposit, according to reports.

The scheme, which was already extended by a year to the end of 2023, encourages lenders to offer low-deposit mortgages on homes worth up to £600,000.

Mr Hunt is due to set out the Treasury’s spending plans at his Autumn Statement next month.

Mortgage borrowers have been the focus of a number of support measures introduced by the Government in partnership with lenders, over concerns people have struggled to afford big jumps in monthly loan repayments.