One of the UK's largest housebuilders, Vistry Group, has warned that its profits will be 'significantly' lower in the first half of the year, as it has been forced to cut prices due to heightened uncertainty caused by the US-Israeli war on Iran.
Shares Plunge to 15-Year Low
Vistry's shares plunged 10.5% in early trading on Wednesday, hitting their lowest level in nearly 15 years, after the company informed shareholders that its first-half profits would be impacted by the fallout from the Middle East conflict.
In a stock market update released just hours before its annual general meeting, the housebuilder—which owns Bovis Homes, Countryside, and Linden Homes—stated that circumstances had changed since its last investor update in March. 'The level of macroeconomic uncertainty has increased, and with it the range of potential outcomes for the current year,' the company said.
Buyer Caution and Cost Pressures
While the rate of sales was higher than a year earlier, Vistry noted that buyers had become cautious in recent weeks, 'reflecting uncertainty arising from the Middle East conflict.' The war had 'created some upward pressure' on the costs of building materials and worker wages, which were likely to persist into the second half of the year, the company added.
Vistry said it was 'mitigating these where possible,' including by negotiating with its suppliers, and in the meantime, it was attempting to attract buyers through larger incentives and discounts. Together, these efforts are expected to weigh on profits. The company has also halted its share buyback program 'to prioritise debt reduction.'
Profit Outlook
'We expect [first-half] profit to be significantly lower than the prior year,' Vistry said, adding that it anticipates a partial recovery in the second half, with profits expected to be flat compared to 2025. The company stated that adjusted pre-tax profits for the entirety of 2026 would likely fall in the 'middle of the range' of analyst forecasts.
Vistry's new chief executive, Adam Daniels, has launched a company-wide 'operational review,' with results expected to be announced in September.
Industry Context
Vistry is no stranger to unexpected profit drops, having issued three profit warnings in 2024. However, management managed to stabilise the business, reporting a 2% rise in adjusted pre-tax profit for the 2025 financial year.
'Vistry's trading update paints a bleak picture of the UK housing market,' said Anthony Codling, a managing director of equity research at RBC Capital Markets. 'Today's update contains good and bad news: progress is being made, but market conditions are providing little, if any, help and execution risks remain high. Vistry is not out of the woods yet, but it is one step closer to the edge of the forest.'
Meanwhile, estate agent Savills reported that while it was trading marginally ahead of forecasts, it expects the Iran war to weigh on UK housing sales. 'Within our key UK market … we have seen greater caution among both buyers and sellers since the onset of the Middle East conflict,' Savills said. It added that its Middle Eastern business, which accounts for roughly 5% of its annual underlying profits, had also 'slowed materially' during the crisis.
