Home Money Vistry defies housebuilding gloom with plans to build 17,500 more homes in 2024

Vistry defies housebuilding gloom with plans to build 17,500 more homes in 2024

by Elijah
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Property developer Vistry hopes to build 17,500 homes in 2024 as demand for affordable housing grows

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Vistry plans to increase the number of properties it builds this year, thanks to growing demand for its affordable housing business.

The real estate developer told investors on Thursday that it expects to build 17,500 more homes in 2024, up from 16,118 delivered in 2024.

In September, Vistry announced it would merge its homebuilding division with its sister business to focus on addressing the shortage in affordable housing supply.

Property developer Vistry hopes to build 17,500 homes in 2024 as demand for affordable housing grows

Property developer Vistry hopes to build 17,500 homes in 2024 as demand for affordable housing grows

Its partnership model, which involves teaming up with registered suppliers, local authorities and the private rental sector to build homes, now accounts for two-thirds of sales.

Chief executive Greg Fitzgerald said: ‘As a leading partnership business, the group is committed to creating quality new homes through the development of new sustainable communities and places that people love.

“We see strong demand for mixed tenure and regeneration housing across the country and are uniquely positioned to take advantage of this market opportunity, helping to address the country’s acute housing need.”

Despite market challenges, Vistry reported an adjusted pre-tax profit of £419m in 2023, up slightly from £418m a year earlier and beating analyst forecasts of £406m. million pounds sterling.

By contrast, rival Persimmon said earlier this week it would build fewer homes this year after posting a bigger-than-expected 52 per cent drop in 2023 profits.

Similarly, Taylor Wimpey reported that its profits had almost halved in 2023.

Builders suffered a slowdown in housing demand in 2023 as rising mortgage rates discouraged buyers, while businesses were also hit by rising costs of materials and wages.

As a result, last year there was a significant drop in the number of new homes built and sold.

Contracts awarded for construction projects in the UK fell £11.1 billion to £69.2 billion in 2023 after a record previous year, and residential housing construction deals fell 13 per cent, according to the Barbour ABI industry analysts.

RBC equity analyst Anthony Codling said: ‘The partnership model is working well for Vistry. Visibility into the volumes provided by contracts protects you from the vagaries of the open market.

“The speed at which Vistry has transitioned to associated sales, which accounted for 67 per cent of completions in fiscal 2023, is impressive and the Group remains confident of achieving its three medium-term targets: 40 per cent of ROCE, £800m of operating profits and £1bn.” return to shareholders.

‘There is still a long way to go and the partnership market is not immune to (funding) headwinds, but Vistry has entered the spring at a brisk pace.

“In our opinion, the valuation is comprehensive and takes into account the perfect fulfillment of the Group’s objectives, so, in relative terms by sector, we believe that investors can find better value and advantages elsewhere.”

vitry shares rose 0.45 percent Thursday morning, after rising 47 percent in the past year.

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