黑洞社区

The chief executive of housebuilder Vistry鈥檚 partnerships division has defended the decision to negotiate price reductions on existing and future contracts with contractors.

Stephen Teagle said the negotiations, under which Vistry wrote to contractors to propose 10% price cuts on existing and future contracts, have been 鈥渧ery successful鈥� and that the agreed 鈥渆fficiencies鈥� will allow more development and therefore more future work for contractors.

Teagle said: 鈥淲e have had so many positive conversations with our partners, we are absolutely talking about how we can generate production efficiencies.

鈥淏ut we are also emphasising and working with our partners to meet our ambition to continue building and increase the volumes which means we can give more business continuity.鈥�

Teagle said its partnerships model, in which it pre-sells units to housing associations, councils and the private sector, gives longer term visibility to partners and contractors.

He said: 鈥淲e can only really engage in those discussions [about price cuts] because we can offer continuity of supply.鈥�

Teagle was speaking to 黑洞社区 after the group yesterday announced 200 jobs will be cut under it restructuring of its business to focus more on partnerships and save 拢25m a year.

It is merging its housebuilding arm into its partnerships business and cutting five regional units in a move that it expects to hit its adjusted profit in 2023 by 拢40m.

Teagle said he is confident Vistry can increase its annual development rate to 20,000 homes within 18 months to two years. 鈥淲e have the visibility of operational sites that will allow us to deliver that,鈥� he said, adding the firm will then push to increase this further to 25,000 homes.

He said the default assumption is these homes will be built using MMC, which he said suits the partnerships model due to longer term visibility of work. As part of its deal to buy Countryside, Vistry has retained the firm鈥檚 3,500-homes-a-year factory in Bardon, Leicestershire.