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Vistry’s completions and profits rise amid high demand for affordable housing
House builder Vistry Group has reported increased completions and profits due to high demand for its affordable housing business.
Full-year results for the year ending 31 December 2023 showed there were 16,118 total completions, up 35% from 11,951 in 2022.
However, the house builder said this figure was slightly down (5.4%) from what it had forecasted to complete for the year.
In 2023, 67% (10,722) of Vistry’s total completions were pre-sold to registered providers, local authorities and the private rented sector, while 33% (5,396) were open market sales.
In September, the firm said it would focus solely on building homes via affordable housing partnerships as the volatile housing market eroded demand for private sector building.
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For the year, Vistry reported an adjusted revenue of £3.56bn, up 29% from £2.77bn in 2022. Pre-tax profit also rose to £305m, up 23% from £248m in 2022.
Chief executive Greg Fitzgerald said the partnership model “provides visibility of future revenue and enables us to deliver new homes at greater scale and pace”.
He warned, though, that complying with the government’s rule for second staircases on high-rise projects had already cost the group £19m.
This year, Vistry aims to deliver more than 17,500 completions amid rising demand from private rented providers and easing mortgage rates in recent months.
Mr Fitzgerald said: “We saw good levels of demand throughout the year for partner-funded sales.”
Demand from registered providers for additional affordable homes beyond Section 106 sales “remained robust”, with for-profit registered providers demonstrating “particularly strong demand”.
Demand from the private rented sector was “more constrained” during the year, reflecting the sector’s “greater sensitivity to the higher interest rate environment”. However, there was a “step-up in demand” from the rental sector in quarter four of 2023, he said, which has continued into 2024.
In November, Vistry signed an agreement with Blackstone-backed providers Leaf Living and Sage Homes for the sale of more than 2,800 homes, with a total gross development value of £800m. The homes will be delivered by the end of 2025.
During the year, Vistry secured £87m of affordable housing grant funding under its strategic partnership with Homes England, taking the group’s total grant funding under the current Affordable Homes Programme, which will run till 2026, to £170m.
Mr Fitzgerald said: “We see high demand for mixed-tenure housing and regeneration across the country and are uniquely placed to deliver on this market opportunity, helping address the country’s acute need for housing.
“The business has started the year with a real passion and commitment to deliver on its strategy and medium-term financial targets, and we expect to make good progress during 2024.”
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