APRIL 5, 2026
Vistry announced plans to raise cash through a fire sale of some of its homes after bosses underestimated the cost of building houses in the south of England – Maureen McLean/Shutterstock
A housing giant called “Labour’s favourite” builder risks being plunged into fresh financial trouble as the fallout from the Iran conflict intensifies.
With the spectre of an inflationary shock looming, Vistry Homes, which receives hundreds of millions of pounds a year in taxpayer-funded loans and grants, has warned that rising cost pressures could trigger a cash crunch.
Under what the listed developer calls a “severe but plausible downside scenario”, Vistry warned it could “exceed its committed borrowing facilities” and breach certain loan agreements.
It comes as the company battles concerns about its finances. Shares in Vistry have crashed by more than 50pc over the past month following the surprise departure of Greg Fitzgerald, the chief executive, compounded by concerns over a liquidity squeeze.
Vistry has announced plans to raise cash through a fire sale of some of its homes, following a string of profit warnings after bosses underestimated the cost of building houses in the south of England.
The company listed a range of “adverse but realistic stresses” that could lead to it struggling to meet its debt repayments, including a 5pc jump in construction costs from September.
Experts have warned that Middle East hostilities pose one of the biggest threats to the construction industry.
The war in Iran is expected to push up the cost of shipping, energy and raw materials in the coming months, weighing on housebuilding activity.
Rising number of late payments
Vistry sounded the alarm over its finances in its annual report published late last month.
However, Vistry added that the challenges outlined “are not expected to arise concurrently”.
It also said that the “downside scenario” was designed to test the resilience of the Group’s financial position, “rather than to reflect a likely outcome”.
Other stresses that could weaken its financial position are a stagnating housing market, a 3pc reduction in prices, completion delays, and a spike in cancellations, Vistry said.
It comes as new data show more than half of Vistry’s payments to suppliers have been late.
Subcontractors were most likely to wait the longest to be paid by Countryside Properties, a division of Vistry, with 57pc of invoices paid late between July and December, according to data filed with the Government.
Countryside took 46 days on average to pay its suppliers, while Vistry took 41 days.
It follows reports that Vistry has been demanding deferrals and discounts from subcontractors in at least two regions: Essex and the South West.
Iain McIlwee, the chief executive of Finishes and Interiors Sector, the trade body for interior construction suppliers, said the scale of the problem was “concerning”.
“We have had contact with a number of companies reporting payment concerns associated with Vistry, blaming ‘administration problems’, ‘missed applications’ and the old ‘sorry, forgot to process your invoice’,” he said.
“These are companies working across multiple sites that have incurred significant costs and are not being paid despite chasing multiple times.
‘The worst reputation’
Vistry owed £220.3m that was not paid in the agreed period, the data show, while Countryside owed nearly £400m. Vistry paid 86pc of its invoices within 60 days, while Countryside paid off 85pc.
One subcontractor, who did not wish to be named, claims that “at the moment Vistry has got the worst reputation” for late payments.
Another said: “All the major housebuilders and ‘tier ones’ are doing the same, but we just find Vistry is repeatedly late. They’re the worst that we deal with, to be perfectly honest – they’ve got a bit of a reputation.”
Crest Nicholson was another culprit, leaving 57pc of invoices unpaid between May and October and taking 36 days to pay subcontractors. It did not disclose the amount.
It comes as the Government sets out plans to crack down on late payments from large companies to smaller suppliers with a mandatory 60-day deadline.
Vistry has been handed around £315m in grants and loans, according to Matthew Pennycook, the housing minister, as part of the Government’s £39bn programme to build more social and affordable housing.
A spokesman for Vistry said: “There is no ongoing issue with payment of our sub-contractors. Our partnership model operates differently to a housebuilding model and is based on continuity and visibility of future work for our sub-contractors and supply chain.
“We have examples of many sub-contractors working positively with us on delivering high-quality new homes.”
The spokesman also shared several emails from suppliers stating they had good relations with Vistry.
They included an email from Reece Jackson, the managing director of Reece Drywall Limited, a construction company, who said: “I have never had any specific issues relating to payment and payment terms.”
Courtesy/Source: The Telegraph
