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Housebuilding giant reveals uptick in sales to for-profit providers
House builder Vistry has struck an increasing number of deals with for-profit providers as traditional housing associations cut back on their development plans, a senior executive has said.
Speaking to Inside Housing, Stephen Teagle, chief executive of Countryside Partnerships, a subsidiary of Vistry, said the firm had sold homes to “half a dozen” for-profits over the past six months.
“They obviously don’t have the issues on their balance sheets, or have a better balance sheet, and don’t have to deal with some of the issues with existing stock that some of the traditional RPs [registered providers] have,” he said.
Among the house builder’s clients are Blackstone-backed Sage Homes and BlackRock-backed Heylo, both of which have fast-growing shared ownership portfolios.
Vistry has reported that the number of homes it is building for Sage has significantly increased. The house builder is signed up to Sage’s shared ownership Home Stepper scheme.
Nevertheless, Mr Teagle said the “majority” of contracts it has signed in the past six months have still been with traditional housing associations.
It comes despite many landlords dialling down their development ambitions in the face of having to deal with improving existing stock.
But Mr Teagle added: “Even where existing housing associations have had to review the scale of their programmes, those programmes are still very sizeable.”
He said Vistry, which was known as Bovis up until 2019, did not have a preference over the type of registered provider it worked with. “We’re agnostic over whether they are a for-profit or a traditional housing association,” he added.
“The most important thing for us is the capacity to deliver more.”
Mr Teagle’s comments came as Vistry last week reported a 3% rise in sales for its former partnerships business, with 9,422 completions. He attributed this growth partly to a “more positive operating environment”.
Since Vistry acquired rival builder Countryside in a £1.25bn deal in 2022, the group has been upping its focus on affordable housing delivery.
The firm is merging its housebuilding arm with its partnerships business to focus on mixed-tenure affordable housing.
As part of this shift, Vistry signed an £819m deal with Sage Homes and private rented sector provider Leaf Living for nearly 3,000 homes in November.
Under this strategy, Vistry is aiming to deliver 20,000 homes in the next two-and-half years. Despite the current market uncertainties, Mr Teagle said: “Our ambition remains pretty much the same.”
Of the 20,000 homes, Vistry expects 35% to be for open market sale and the remainder to be affordable or for the private rented sector, he added.
“I think the traditional housebuilding model is outdated and our’s is a 21st century business model equipped to deliver a range of housing tenures and choice,” Mr Teagle concluded.
Overall, Vistry said its group full-year performance for 2023 was ahead of previous guidance, with adjusted pre-tax profit expected to be “in line” with the previous year’s figure of £418.4m.
The group will report its full-year results on 14 March.
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