Vistry posts 8% growth in completions under new partnerships model

Stephen Teagle, chief executive of partnerships and regeneration at Vistry, said the results had been driven by the group’s ability to deliver homes with partners and demonstrated that its move to a partnerships-only model was “the right thing to do”.

“I’m absolutely convinced this is the model for housebuilding for the 21st century – the approach is working with partners on delivering multiple tenures,” he told Inside Housing.

In September last year, Vistry announced it would be focusing on the “capital-light, high-return partnerships model”, after its merger with Countryside Partnerships expanded the partnerships side of the business.

During the period, Vistry said it entered into new agreements with 45 different partners, including housing associations Places for People and LiveWest, and private rented sector (PRS) providers Sigma and Citra.

Vistry’s approach is to pre-sell a minimum of 50% of the homes on a development. It also requires a 40% return on capital employed and an operating margin of over 12%.

“A site for us often has triple tenure. There’s PRS, affordable and open-market sale. A third, a third, a third is our approach. That means that we can create place quickly, because we’ve already sold the affordable and the PRS [tenures],” Mr Teagle said.

Vistry said around 75% of total completions were partner funded, with registered providers and local authorities securing “good levels” of additional affordable and Section 106 affordable housing.

Adjusted operating profit is expected to be up 9.8% on the previous period to an estimated £227m, compared with £206.7m in the previous period.

Adjusted profit before tax is expected to grow from £174m to £186m.

Vistry said it had benefitted from lower year-on-year building material costs during the period, reflecting its “ongoing engagement with the supply chain”.

Looking ahead, Mr Teagle said he hoped the new government would commit to bringing in a new Affordable Homes Programme “as quickly as possible”.

“The really important thing that we’d like to see from the government during the next three months, as they move towards the Autumn statement, is a commitment to place Homes England as a key part of their delivery strategy,” he said.

Mr Teagle added that the Labour government had adopted a “pleasing” underlying approach to housing.

“There’s a presumption in favour of housing delivery,” he said. “When did we last have the chancellor of the exchequer supporting housing supply?”

In June, Vistry also agreed a £580m build-to-rent deal with private equity giants Blackstone and Regis. The private equity firms will take on a portfolio of new build homes developed by Vistry and manage them under their build-to-rent provider, Leaf Living.