Property & Construction Daily

The Property & Construction Daily provides a sector-specific comment from leading analyst Alastair Stewart. His daily perspective provides a round-up of market statements, news, economics and views from the property and construction sectors.

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December 11, 2023

VTY | Economics – Asking prices decline as home sellers react to competition, Rightmove

Company news

Vistry Group (VTY, p, £m)

Formed from the mergers of Bovis Homes and housebuilding and partnerships divisions of Galliford Try (GFRD) and Countryside Partnerships. Commencement of share buyback programme. The group has today  commenced the share buyback programme to repurchase up to £55m as previously announced on 11 September. The buybacks are expected to be completed no later than the announcement of the FY (Dec) 23 results on 14 March. The group intends to pursue a two times adjusted earnings ordinary distribution cover in respect of a full financial year, with such distributions made through either share buybacks or dividends, the method to be determined by the Board.

Economic data

House prices. Home vendors’ average asking prices have declined by 1.9% this month, following a 1.7% reduction in November and slightly higher than the 20-year average fall of 1.5% in March “as sellers get more competitive”, according to Rightmove’s latest House Price Index. The Y/Y rate of decline, however, eased to 1.1% from -1.3% in the 12 months to November, “a more resilient market than many predicted as it continued its slow transition from frenzy to more normality,” according to the UK’s leading property portal. Prices in seven out of 11 regions are higher than a year ago. The North West leads the way (+1.5%), while the South East is the worst performer (-3.7%). Buyer demand in the mid-market, second-stepper sector is up the most against last year’s post-mini-Budget period at +9%, while overall buyer demand is up by 6% after some movers paused to wait for calmer conditions. The number of sales agreed in the year to date is just 13% behind the same period last year, “a better-than-expected figure given that the 2022 market was much more frenetic, and three of the ten strongest months on record for buyer demand occurred in the first half of that year”. Notwithstanding, the average time to secure a buyer in November, at 66 days, is 47% above the 45 days a year earlier, prompting Rightmove to advise “motivated sellers still need to price below their local competition to secure a sale, as buyer affordability remains stretched.

Percentage monthly change in average asking prices

Prices are as at the previous day’s close. Where quoted, net debt is pre-IFRS16 (excluding leases) unless otherwise stated.

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