Housebuilder Vistry will stop building homes in south east and focus on north - as it posts largest ever loss

Housebuilder Vistry Group has posted its largest ever loss as the property market grapples with sluggish sales.Vistry has announced plans to shut its operations in south-east England and cut its yearly target for the number of homes it completes. The group cut its annual housebuilding target to approximately 12,000 homes a year over the medium term, down from around 16,000, with the regional office network shrinking from 25 locations to 12. Vistry's plans to scale back housebuilding came after new chief executive Adam Daniels launched a review into the business. He plans to build fewer homes in partnership with housing associations and corporate landlords, and focus on northern England where the market is stronger. The housing market in London and the south-east has been in the doldrums of late, with the value of a flat in the capital plummeting by £71,000 in four years. In the North West, though, house prices rose by nearly 5 per cent last year. Vistry has cut its annual home completion target and is reducing the size of its businessVistry plummeted to a £661.3million loss in the six months to June 30, dragged down by a £475million writedown of goodwill and a further £73million set aside for building-safety repairs.The large writedown is thought to relate to acquisitions made in the past six years, before the housebuilder appointed its boss and changed its strategy. Daniels said: 'We are repositioning Vistry as a specialist mixed-tenure housebuilder that will deliver consistent, cash-backed growth in earnings alongside highly attractive returns on capital. 'To achieve this the group will need to be smaller, more focused geographically and with increased discipline and control in operational delivery and allocation of capital.' For the full year, Vistry now expects to post an adjusted profit before tax of £165million, after making an adjusted loss of £83.3million in the first half. Vistry's net debt increased to £468.8million in the period, up from £293.1million at the same point a year ago. Shares in FTSE 250-listed Vistry have dropped by about 60 per cent in the past year and were down 5.57 per cent to 253.06p on Thursday morning. Julie Palmer, a managing partner at BTG, said: 'The construction industry cannot take much more of being stuck in this limbo. If we see the larger housebuilders like Vistry lose their foothold, they could take swathes of smaller firms, contractors and sole traders down with them.'She added: 'This means meeting housing demand will be even more out of reach, while the wider economic impacts batter an already damaged UK economy.'Construction companies of all sizes will be anxiously anticipating the Budget to see what action the government plans to take to address the business financial distress in the sector and try to get the housing market kickstarted before it is too late to recover.' The update from Vistry has emerged as the government continues its quest to oversee the construction of 1.5million new homes in England by the end of parliament. Vistry reported an adjusted loss before tax of £83.3million in the six months to June, against an £80.6million profit a year ago. The group flagged 'disappointing summer sales of private homes' and withdrawals or renegotiation of deals to build affordable homes. Its total average selling price rose by 3 per cent to £292,000, against £283,000 a year ago. But the housebuilder said it planned to cut the prices of some properties to raise cash, selling assets and slowing construction on sites where sales had been weaker.The business completed 6,304 homes in the period, down 8 per cent from a year earlier. In June 2026, Vistry launched a voluntary redundancy scheme. Today it said it planned to make £25million worth of savings via a voluntary staff exit scheme and recruitment freeze, on top of the £50million annual savings targeted through its restructuring.It said it reduced its workforce to 4,150 at the end of July, with 350 people leaving since the summer.Victoria Scholar, head of investment at Interactive Investor, said: 'The housebuilder has been faced with macro headwinds from this year’s energy shock leading to cost pressures, weaker affordability and consumer confidence amid the higher-for-longer interest rate backdrop.'Shares had already had a painful run lately, shedding close to 60 per cent year-to-date before this morning’s further sharp slide, underscoring the challenges at hand for its boss and the need for a drastic turnaround.'DIY INVESTING PLATFORMSAJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. 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