Housebuilding giant Vistry has issued a stark warning that its first-half profits will be significantly lower than the previous year, as it grapples with the fallout from the ongoing conflict in the Middle East. The company is increasingly relying on incentives and discounts to stimulate demand, while also facing rising material and labour costs.
Profit Warning and Market Reaction
Shares in Vistry fell sharply in morning trading on Monday after the unexpected announcement. The group revealed that house sales have eased in recent weeks due to uncertainty stemming from the Iran war, although year-to-date open market sales remain approximately 30% higher compared to the same period last year.
Vistry stated: “Primarily due to the up-front profit impact of the actions to accelerate cash generation … we expect first-half profit to be significantly lower than the prior year.” The company anticipates that second-half profits will remain flat year-on-year, with full-year underlying pre-tax profits expected to land in the middle of its forecast range of £168 million to £283 million. This would represent a decline from the £268.8 million underlying profit reported for 2025.
Rising Costs and Incentives
The housebuilder is experiencing an uptick in material prices and labour costs, which it expects to persist into the second half of the year. To counteract slowing demand, Vistry is increasing the use of incentives and discounts, particularly on low-margin properties and developments nearing completion.
Broader Housing Market Context
The warning comes amid a broader slowdown in the UK housing market. Data from lender Halifax released last week showed that annual house price growth halved month-on-month in April to 0.4%, as rising living costs and higher mortgage rates dampened buyer enthusiasm. Prices fell by 0.1% in April, following a 0.5% decline in March, according to the Halifax index.
New Leadership and Strategic Review
Vistry’s new chief executive, Adam Daniels, who took over from former executive chairman Greg Fitzgerald last month, is conducting a comprehensive review of the group. The findings are expected to be announced alongside the interim results in September.
The company reiterated its commitment to its partnerships strategy, stating: “The board and our new chief executive, Adam Daniels, remain fully committed to the partnerships strategy and the key role our differentiated model can play in delivering the huge need for new housing across the country.”
