One of the UK's biggest housebuilders, Vistry, has warned that its profits will be "significantly" lower as it faces heightened uncertainty caused by the US-Israeli war on Iran. The company, which owns Bovis Homes, Countryside, and Linden Homes, has been forced to cut prices amid cautious buyer behaviour.
Shares plunge as profit outlook worsens
Vistry's shares fell 10.5% in early trading on Wednesday, hitting their lowest level in nearly 15 years, after the company told shareholders that first-half profits would be impacted by the Middle East conflict. In a stock market update issued ahead of its annual general meeting, the housebuilder said circumstances had changed since its last update in March.
"The level of macroeconomic uncertainty has increased, and with it the range of potential outcomes for the current year," Vistry stated. While sales rates were higher than a year earlier, buyers had become cautious in recent weeks, "reflecting uncertainty arising from the Middle East conflict."
Cost pressures and mitigation efforts
The war in Iran has "created some upward pressure" on the costs of building materials and worker wages, which are likely to continue into the second half of the year, Vistry added. To counteract these pressures, the company is negotiating with suppliers and offering larger incentives and discounts to attract buyers. However, these efforts are expected to weigh on profits.
Vistry has also halted its share buyback programme "to prioritise debt reduction." The company expects first-half profit to be "significantly lower" than the prior year, with a partial recovery in the second half, leaving profits flat compared to 2025. For the full year 2026, adjusted pre-tax profits are expected to be in the "middle of the range" of analyst forecasts.
New CEO launches operational review
Vistry's new chief executive, Adam Daniels, has initiated a company-wide "operational review," with results expected in September. The company has a history of profit warnings, having issued three in 2024 before stabilising with a 2% rise in adjusted pre-tax profit for the 2025 financial year.
Anthony Codling, managing director of equity research at RBC Capital Markets, commented: "Vistry's trading update paints a bleak picture of the UK housing market. 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."
Broader market impact
Estate agent Savills also noted the impact of the Iran war on UK housing sales. While trading marginally ahead of forecasts, Savills said it had seen greater caution among buyers and sellers since the onset of the Middle East conflict. Its Middle Eastern business, which accounts for roughly 5% of annual underlying profits, had also "slowed materially" during the crisis.
