Crest Nicholson has reported a pre-tax loss of £35.2 million for the six months to the end of April, swinging from a profit of £9.4 million in the same period last year. The housebuilder also lowered its profit outlook for the year, citing challenging market conditions and weaker consumer confidence.
Market Pressures and Political Uncertainty
The company warned that the housing market remains under pressure from slower activity and reduced buyer sentiment. It flagged that speculation over potential property tax changes in the autumn budget, including a council tax surcharge on expensive homes and higher taxes on rental income, created uncertainty ahead of announced reforms.
Crest noted an “encouraging uplift” in sales from mid-January to the end of March, but said confidence subsequently declined due to broader political and economic uncertainty. This led to a slowdown in new inquiries and visitor levels, as well as more cautious behavior among land buyers.
Cost Pressures and Strategic Response
Building material prices remain about 3%-4% higher on average, adding to cost pressures. In response, Crest said it is reducing land buying and slowing the pace of activity at new developments. The company also sought temporary relaxation of its lending terms to shore up finances.
Profit Outlook Revised Downward
Crest now expects full-year underlying earnings to fall in the “lower half” of its previously guided range of £5 million to £15 million, which was already slashed in April. The latest update sent its share price down by about 10% on Thursday morning.
Supportive Government Targets
Despite the challenges, Crest expressed encouragement from supportive elements of the housing market, such as government targets to increase housebuilding. However, the immediate outlook remains subdued amid political and economic headwinds.
