ousebuilder Vistry Group has said the number of homes it built in the first six months of the year slowed as higher interest rates pushed down how quickly it could sell properties.
The business said it had seen a further slowdown in sales on the open private market over recent weeks as the Bank of England’s base rate was hiked yet again.
“Following the recent increase in the Bank rate and mortgage costs we have seen a slowdown in the open market private sales rate over the past four weeks,” it said.
“Both our housebuilding and partnerships businesses are mitigating this through bulk transactions with housing associations and local authorities.”
The group delivered a half year performance in line with our expectations despite the challenging macro-economic conditions and higher interest rate environment
Vistry said that it built 2,847 homes in the six months to the end of June, down from 3,219 in the same period a year earlier.
The business said that it had reduced the number of homes its housebuilding unit planned to build this year as well.
“The expected year-on-year reduction in private sales rate for housebuilding is reflected in our build rates,” it said.
Adjusted revenue hit £810 million, down from £902 million, the housebuilder said.
“The group delivered a half year performance in line with our expectations despite the challenging macro-economic conditions and higher interest rate environment,” said chief executive Greg Fitzgerald.
Vistry now expects adjusted pre-tax profit to hit more than £450 million in the full financial year.
The property industry has been at the forefront of the fight against inflation in the last year.
The Bank of England is tasked with getting inflation under control, and the main tool it has to do this is by changing interest rates.
This impacts what people pay every month towards their mortgage, so by putting up interest rates it reduces the amount of money that mortgage-holders have to spend on other things.
That, the theory goes, should reduce demand in the economy, which will therefore reduce pressure on prices.
Since December 2021 the Bank of England has hiked its base rate 13 times, bringing it from 0.1% to 5% during that period. This has put pressure on borrowers, and house prices have started to stagnate and fall.