Vistry is on track to exceed its profit margin targets after a better-than-expected start to the year, it has said in a trading update this morning.,
The housebuilder, in an update for the six months to June 2022, said good demand has led to an 11% increase in its average weekly private sales rate to 0.84 units.
It now expects its adjusted profit before tax to be at the ‘top end’ of market forecasts at around £417m.
The group’s housebuilding division completed 3,219 homes, up slightly on the 3,126 achieved in the same period last year, with its adjusted gross margin now set to exceed its initial target of 23%. Meanwhile. Vistry’s partnerships arm completed 1,106 homes in the half-year, a 24% increase year-on-year. It now expects its partnerships operating margin to be ahead of its 10% target.
The firm said strong demand has been accompanied by house price increases of 5% to 8%, offsetting cost increases in the period, with build cost inflation around 6%.
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It said planning remains a barrier.
It said: “Planning remains the single most significant constraint on the business, from continuing capacity issues within local planning authorities, to the increasingly challenging political and regulatory environment around issues such as nutrient neutrality.
“We are responding proactively by factoring longer lead times into our site forecasting, which enhances our control, and increasing our senior expertise in these areas.”
Vistry last week announced it is backing Housing Today’s A Fair Deal for Housing campaign calling on the government to properly commit to its 300,000-home development target (see more below).
A Fair Deal for Housing
Housing Today believes the government should not back away from its manifesto pledge of building 300,000 new homes a year by the middle of the decade. We badly need more homes, and a lack of supply is a major factor in creating problems of affordability for both buyers and renters.
Over the next few months, Housing Today will be exploring potential solutions to help us ramp up housebuilding to 300,000. These are likely to include different ways of working, funding asks of government and policy ideas that could boost housebuilding.
We want to hear from you: what do you think can make a difference at a policy level?
What can the industry do better?
We believe that, with the right commitments from ministers and the industry, it is possible to build more homes and help the government to meet its objectives to “build beautiful”, improve quality and safety, boost home ownership and level up the UK.