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1:00 AM 18th January 2025
business
Opinion

Market Analysis: Persimmon & Vistry

Persimmon: Better Positioned Than Many Competitors by Focusing onMid-Market Homes; Vertical Integration Continues to Give Persimmon an Edge. Vistry: Mismanagement Concerns May Extend Across the Group Behind Profit Warning; Partnership Model and Reliance on Brownfield Sites Add Cost Complexity.


In the UK housebuilding space, Yanmei Tang, Analyst at Third Bridge makes a series of remarks regarding Persimmon, informed by insights from industry experts:

"Our experts say buyer sentiment in the housing market remains tricky to assess due to the seasonal slowdown, but while demand for high-priced homes is softening, lower-priced properties are holding up well. Persimmon is better positioned than many competitors by focusing on mid-market to lower-priced homes, which could provide a buffer against broader market pressures.

"Although the industry is grappling with 3-5% cost inflation, Persimmon appears well-hedged, though the upcoming integration of the Future Homes Standard and tax changes are significant cost concerns.

"Over the past 18 months, the company has become more aggressive in land acquisition, competing more fiercely for sites against other major developers. Our experts say the proposed capital gains and inheritance tax changes are expected to drive a short-term influx of land opportunities, particularly from agricultural sites. Long-term supply will depend on planning reforms.

"Vertical integration continues to give Persimmon an edge, with plans to expand timber frame production to 40% of its total output, helping balance in-house and external supply."

Also in the UK housebuilding space, Yanmei Tang, comments on Vistry:

"Vistry’s £165m profit warning highlights systemic issues in cost forecasting and oversight, particularly in its southern division. While management points to isolated problems, our experts suggest a culture of mismanagement may extend across the group.

"The company’s internal controls are weaker than competitors like Barratt and Redrow, with rushed builds and limited site-specific reviews amplifying risks. A focus on short-term targets has further strained operational discipline.

"Vistry has been aggressive in land acquisitions, capitalizing on a quieter market to secure strategic opportunities. These efforts could pay off if planning reforms and housing policy changes create favorable conditions.

"The shift towards partnerships has reduced capital requirements but introduced fixed-revenue risks, making cost control crucial. Our experts also note that Vistry’s reliance on brownfield sites adds complexity and potential for unexpected costs."


Third Bridge is a global primary research firm that interviews more than 6,000 internationally recognised industry experts and business leaders a year to compile 360-degree market intelligence for institutional investors. www.thirdbridge.com