Vistry maintains full-year outlook despite profit slump

Despite a sharp drop in first-half profit, Vistry is betting that a wave of government support for affordable housing will revive growth in the latter half of the year. In a sector still grappling with high interest rates and faltering demand, the housebuilder's wager reflects cautious optimism that the tide may finally be turning.

Vistry expects its adjusted pre-tax profit for the first half of 2025 to fall by nearly 34%, with results slipping to £80 million from £120.7 million a year earlier. The housebuilder, however, maintained its forecast for annual profit growth, banking on increased government support for affordable housing to fuel a stronger second half.

Britain’s housebuilding sector has been navigating a tentative recovery, hindered by high interest rates and broader economic turbulence. But there are growing signs of a shift. With borrowing costs beginning to stabilise, the outlook is brightening, particularly after a £10 billion funding boost from Chancellor Rachel Reeves. The investment, announced last month under the new government's first multi-year spending review, is aimed at accelerating the construction of thousands of homes across England.

Vistry anticipates this government support will translate into a surge in contracts with affordable housing partners later this year, with the momentum likely to extend into 2026.

Costs and demand pressures

Despite some improvement in open market demand, affordability remains a persistent challenge—especially for first-time buyers. Expectations of near-term interest rate cuts have been tempered, compounding the pressure on consumers and developers alike. Vistry, which scrapped its final dividend last year as a cost-cutting measure, continues to anticipate only modest build cost inflation through 2025.

According to analysts at Jefferies, Vistry reassured on liquidity, but 2H25 delivery remains key. Vistry’s refinancing of its £500m Revolving Credit Facility and £400m Term Loan on unchanged terms with its original lenders should reassure investors, it said. However, it cautions that with 70% of earnings expected in H2, execution risk remains high.

Encouragingly, Vistry cites “positive noises” from Registered Providers amid a £2bn Affordable Housing top-up and broader government support—momentum Jefferies believes could translate into materially higher contract volumes in H2 2025 and beyond.