Vistry, one of Britain's largest housebuilders, is preparing to close almost half its offices and cut jobs as it battles mounting losses and a worsening housing market. The company plans to shut 12 of its 25 offices nationwide as part of a restructuring programme designed to save £50m next year.
The closures, which will take effect in January, will reduce its office network to just 13 locations. The company employs around 4,500 people, although it has yet to confirm how many jobs will be lost.
Record loss and rising debt
The announcement follows a record £661m half-year loss in September. Vistry has also warned that it expects to build fewer homes as higher mortgage rates and weak buyer demand hit the market.
Chief executive Adam Daniels described the restructuring as a “difficult but necessary” decision. He said the company had taken “decisive action to create a smaller, more focused and disciplined business”.
Vistry expects average daily net debt to reach £800m in the second half of the year, compared with £771m during the corresponding period in 2025. The company has blamed difficult trading conditions, cautious buyers and affordability pressures for its deteriorating performance.
Mortgage costs and house price outlook
Mortgage costs have risen sharply amid renewed inflation concerns linked to the conflict in the Middle East. According to Moneyfacts, the average five-year fixed mortgage rate has climbed to 5.99%, compared with 4.96% in early February. Higher borrowing costs are putting further pressure on buyers and developers, particularly in markets already struggling with affordability.
Savills has forecast that UK house prices will fall in 2027, with a recovery not expected until the second half of 2028. London, the South East and the East of England are expected to face the greatest pressure.
Impact on building targets and investors
Vistry's restructuring comes despite the company securing £350m in government funding in August to support affordable and social housing development. The wider slowdown is also raising questions about Labour's target of delivering 1.5 million new homes in England during this parliament. Official figures cited in the report show 306,640 housing starts across the UK since July 2024, although the UK-wide figure is not directly comparable with the government's England-only target.
The Bank of England's decision to raise interest rates from 3.75% to 4% has added further pressure to the mortgage market. Investors have also reacted to Vistry's difficulties, with its shares falling more than 4% to £2.77 on Thursday, extending their decline since the start of the year to almost 57%.
For estate agents, the latest announcement underlines the pressure facing the new-build sector as developers contend with weaker demand, higher financing costs and uncertain sales prospects.
