Housebuilder Vistry has said it is hopeful that the recent easing of mortgage costs will boost demand in the housing market this year, as it said it had a better 2023 than some of its rivals.

The affordable homes provider also expects housing shortages to be at the top of the political agenda in the lead up to a general election.

Vistry said demand in the property market was “suppressed” throughout the year, “reflecting the higher interest rate environment and inflationary cost pressures on household income”.

But it went on to provide a more positive outlook, telling investors: “The easing of mortgage rates in recent weeks is encouraging and we are optimistic that this will help stimulate demand in the 2024 financial year.”

Major lenders in the UK, including Barclays, HSBC UK, Halifax and First Direct, have marked the start of the new year by reducing their available rates.

On Thursday, Yorkshire Building Society launched a sub-4% mortgage deal for people with a 25% deposit.

Vistry reported 16,124 new home completions over 2023, down 5.4% from the 17,038 completed the year before, which it said shows the group “significantly outperforming” its peers.

Earlier this week, York-based nationwide builder Persimmon said it sold a third fewer homes last year, and Taylor Wimpey reported about a quarter fewer UK home completions year-on-year.

Vistry also said it expects housing shortages across the country to be an important topic for politicians ahead of a general election expected later this year.

Construction industry
Vistry said demand in the property market had been ‘suppressed’ throughout 2023 (Andrew Matthews/PA)

“We believe the country’s housing crisis will be at the top of the political agenda over the coming months and that Government will need to allocate more funding towards housing,” it said in the update to shareholders.

Meanwhile, the company said it had managed to reduce costs across the business, including on materials and labour.

It comes after announcing the merger of its housebuilding division with its affordable homes business called Partnerships, through which it works with local government authorities and housing associations to build lower-cost homes.

The restructuring was estimated to make about 200 roles redundant as the number of regional offices are reduced, but lead to about £25 million in savings a year.

Full-year adjusted pre-tax profits are expected to be in-line with the previous year’s £418 million, which would be ahead of its earlier expectations.