Housebuilder increases build rate 8% in first half of the year and brings down costs after supply chain price reductions

Vistry has reported an 8% increase in completions in the first half of the year, the firm said in a trading update this morning.

The housebuilder said it completed 7,750 homes in the six months to 30 June, up from 7,143 in the same period the previous year.

Vistry also said it is “confident” it can build 18,000 homes in 2024 as a whole. This figure would eclipse the 17,206 homes delivered by Britain’s biggest housebuilder Barratt last year.

Vistry’s strategy in recent months has shifted towards large forward sale agreements with investors – in which it signs deals to pre-sell homes in schemes.

Greg Fitzgerald Ceo Visiting Site (Retouched Vistry Group) LR

Vistry boss Greg Fitzgeral said he expects Vistry to build 18,000 homes this year

In May it announced a £580m sale of 1,750 homes across 36 developments to Leaf Living, a PRS housing manager backed by Blackstone and Regis.

Three quarters of Vistry’s completions in the half-year have been ‘partner-funded’ deals, including deals with housing associations and local authorities such as section 106 affordable housing pre-sales, with a quarter for direct open market sale.

Vistry said it expects this percentage of partner-funded homes to drop to 65% after 2024 as the open market recovers.

Vistry also repeated its statement that its building costs are lower as a result of its “ongoing engagement with the supply chain”.

>>See also: ‘I’m extremely demanding’: Greg Fitzgerald on delivering the Vistry growth plan

Vistry last year sparked an outcry after it wrote to contractors to ask for a 10% price cut with the business saying it would lead to greater efficiency and more work in the longer term for contractors. The firm defended the move saying it would lead to more work in the longer term for contractors.

In an interview with Building earlier this year, chief executive Greg Fitzgerald admitted many in the supply chain were initially furious. “Week one it was basically ‘Fuck off, I’m not putting any more money in Greg Fitzgerald’s pockets. No way, not a chance’.

“Week two they’ve had a call from another housebuilder saying they’re stopping a development. Ok, they’ll come in for a chat. Week three, they’re offering a discount. By week five they’re now scrambling to maybe give us more because they want that work.”

Vistry’s forward sales for the half year are up 21% year-on-year at £5.1bn,

Forward sales are up 21% on the prior year and total £5.1bn (2023: £4.2bn), while its net debt has fallen from £329m to £323m. Its adjusted pre-tax profit rose 7% to £186m.

Fitzgerald added: “Our partnerships model is significantly outperforming the broader housebuilding market and we are confident we will deliver over 18,000 completions for the full year and make progress towards our medium term targets.

“We look forward to working with the new government to address the country’s housing crisis and are extremely well placed to support its ambition of delivering the biggest boost to affordable housing in a generation.”