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Crest Nicholson results

ended 08. June 2023

House builder, Crest Nicholson, has just published its latest results. Its chief exec says: “Unemployment remains low and mortgage availability remains good albeit at more expensive rates. The ongoing lack of housing supply is continuing to support house prices and these factors are also driving strong levels of rental inflation. The economic case for buying a home therefore remains compelling, but for many first time buyers the higher cost of borrowing and the cessation of Help to Buy are prohibitive to realising this ambition. If interest rates continue to rise, and remain elevated for a sustained period of time, this will undoubtedly exacerbate this issue even further and start to impact demand and confidence again. We continue to call on Government to recognise this challenge and provide further support to these potential homeowners.” Any thoughts on this, and the results, which showed “revenue at £282.7m (HY22: £364.3m), reflecting the economic uncertainty and lower confidence in the housing market during the first half”, send them across ASAP as this story is BREAKING.

4 responses from the Newspage community

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Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
This is the latest in a series of house builders showing weaker results, and although Crest Nicholson sell the case for buying property, it’s with a shaky voice. They also set the case for the Bank of England pivoting, which we all know to be true apart from the governor, Andrew Bailey. Crest also deliver a shot across the bow of the Tories, effectively saying they are unimpressed by the lack of a housing policy.
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Justin Moy
Managing Director at EHF Mortgages
The increase in mortgage rates, and the withdrawal of the Help to Buy scheme, will give us more transparency on how popular new build property really is. For many, the HTB scheme was the only way to buy a suitable home, and has influenced the whole market values over the last decade, not just new-build. Crest Nicholson is reasonably confident about the future, acknowledging what is keeping prices constant at the moment, but also sending a message to the government for more help for borrowers if the high rates are prolonged. Something will have to move, typically some sort of government intervention.
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John Choong
Senior Equity Research Analyst at Investing Reviews
Just as housebuilders were showing encouraging green shoots in their Q1 updates over the past few weeks, Crest Nicholson's latest trading update and the recent fiasco surrounding higher mortgage rates have now put the better-than-expected outlook for the housing market in jeopardy. Having said that, there may be some light at the end of the tunnel, judging by the management's outlook for the rest of the year. Low levels of unemployment paired with inflation could help mitigate the full force of higher mortgage rates. However, this optimism may be undermined if inflation doesn't fall faster than anticipated and/or if the Bank of England continues to hike interest rates at a rapid pace.
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Graham Cox
Director at Bridging Hub
Desperation emanates from every word of Crest Nicholson's trading statement, as they implore the government to do something, anything, to stem the tide. No doubt they would love Help to Buy to make a comeback, as they've made huge profits off the back of it over the past decade. It would, however, be a huge mistake, which is not to say the government won't make it, particularly with the Tories languishing in the polls. What really helps people buy is cheaper house prices. Help to Buy only increases them.