Vistry gets a boost from affordable housing work

The rental sector and affordable housing boosted homebuilder Vistry, despite the industry’s fears of a slowdown in the UK property market.

The FTSE 250-listed group told investors on Wednesday it is on track to meet adjusted pre-tax profit expectations of around £418m for 2022, up 21 per cent from a year earlier.

Private home forward sales stood at £1bn at the end of last year, up from £1.3bn at the end of 2021.

Vistry completed a £1.1bn acquisition of Countryside Partnerships last year, significantly strengthening its affordable housing division.

We see continued demand from partnerships of housing associations, local governments and the private rental sector, with a strong Q1 pipeline.

The group built 6,774 homes last year, compared to 6,551 the previous year. The total number of private homes completed was 5,184, compared to 4,891 a year ago.

Vistry said it delivered 1,600 “affordable” homes in the past year, compared to 1,590 the previous year.

Average selling prices rose by around 6 per cent to £324,000 from £305,000 a year ago, reflecting ‘changes in mix and house price inflation during the year’.

It added: ‘Housebuilding’s private average sale price has risen to c. £376,000 (FY21: £356,000) and an affordable average retail price increased to c. £163k (FY21: £158k).

“Residential construction operated from an average of 142 (FY21: 143) active locations in FY22 and we expect this to be at a similar level in FY23.”

At the end of the year there were 5,352 land acquisitions, compared to 7,667 last year. The group said: ‘The pace of land acquisition in residential construction slowed deliberately in the fourth quarter due to increased uncertainty in the housing market.’

Vistry shares rose today, rising 1.2 percent, or 9.00 p, to 756.00 p in late morning trading, after falling more than 30 percent in the past year.

Shares in fellow homebuilder Persimmon up slightly today, but have fallen by more than 40 percent in the past year.

Vistry CEO Greg Fitzgerald said, “2022 was another year of excellent progress for Vistry, and despite more challenging market conditions following the September mini budget, earnings are in line with expectations and ahead of where we are at. were beginning. of the year.

“We started this year with a focus on maximizing Vistry’s unique ability as a leading home builder and partner company to increase the supply of quality homes for all rental periods.

The Group’s forward sales position totals an encouraging £4.6bn and we have a strong pipeline of new opportunities within Partnerships.

“It is still too early in the current year to predict the outcome of private sales, but I remain cautiously optimistic that buyer sentiment will improve in the coming months.”

Vistry’s weekly retail sales by outlet for 2022 fell from 0.76 to 0.71, but fell to 0.46 in the fourth quarter, due to heightened macroeconomic uncertainty and higher mortgage costs.

Analysts from Peel Hunt said: ‘The outlook for Partnership housing continues to look stronger than the mainstream market due to the severe shortage of affordable housing.

“Vistry’s exposure to this sector clearly stands out from the rest of the industry and should allow it to outperform over the medium term.”

Many homebuilders are facing a variety of headwinds that could affect sales, including a surge in mortgage payments. Political uncertainty also weighed on sentiment last year.

Data released today by the Office for National Statistics shows the median house price increased by 10.3 per cent to £295,000 in November, £28,000 more than the previous year, according to the Office for National Statistics.

But the average price fell by 0.3 percent or £1,000 compared to October 2022, when the average price hit an all-time high of £296,000. It was the first time prices fell since October 2021. The annual growth rate also slowed, from 12.4 percent in the previous month.