In the latest sign of a change in the market, Construction Enquirer have reported that prominent house builder, Vistry communicated with its sub-contractors recently that they were proposing a 10% reduction in payment on existing contracts. While this move has been confirmed, the company has opted to reserve further comments.
Nick Pilgrim, Managing Director of EEBS affirms, “This is confirmation – if any was needed – of the increasing pressures across the industry. Although on the one hand we are seeing both the stabilisation (if not reduction) of material costs, and the cooling of sub-contractors pay rates, the impact of interest rates and declining house prices still outweigh these reductions. The aggressive rhetoric reported in this article suggests that the appetite amongst some in the industry for subby-bashing has never really gone-away!”
As Construction Enquirer went on to explain, Vistry made a strategic pivot by transitioning its business model into a partnerships-only housing business. This shift is part of a broader strategy, spearheaded by Chief Executive Greg Fitzgerald, aiming to return £1bn to shareholders over a span of three years. The return is anticipated as assets are gradually released from the traditional house building division.