Major housebuilder Vistry has reduced prices on some properties by more than £100,000, with discounts reaching 17% as the company seeks to improve cash generation and reduce debt levels.
Analysis by investment bank RBC (Royal Bank of Canada) found that of more than 1,200 properties listed by Vistry during May, the average discount was 8.4%, according to the Daily Telegraph.
Share price decline
The price reductions come as Vistry has seen its share price fall 65% over the past 12 months amid profit warnings. The company’s struggles reflect broader challenges facing the housebuilding sector, with rising costs linked to Middle East conflicts and reduced demand due to higher mortgage rates.
Anthony Codling, Managing Director of Equity Research at RBC Capital Markets, identified Vistry’s reliance on the Government’s stalled social housing building programme as a contributing factor to the company’s difficulties. The broader property market has also seen price pressures in recent months.
Company response
A Vistry spokesman confirmed the pricing strategy, stating: “We have clearly outlined the actions we are taking to improve cash generation and reduce debt levels, which include targeted pricing initiatives to reduce inventory.”
The spokesman added that despite challenging market conditions affecting all companies in the sector, the group maintains a forward order book of £4.5 billion and continues to build at scale.
Regulatory background
Last year, Vistry was one of seven housebuilders to agree to pay a £100 million settlement following allegations of price collusion.
The price cuts represent a significant shift in strategy for one of the UK’s major housebuilders, highlighting the financial pressures facing the new build sector as it contends with stalled government programmes, elevated construction costs, and interest rate challenges affecting buyer affordability.
