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Crest Nicholson trading update - reaction

ended 21. August 2023

This morning, in its trading update, Crest Nicholson announced that it expected adjusted pre-tax profit to reach £50m in the year ending October 31. It had previously expected profit to reach around £73.7 million.

It announced: "Additional mortgage borrowing for those looking to upgrade or for those with low levels of equity, notably first-time buyers, has become significantly more expensive with no Government support (following the end of Help to Buy) now in place to cushion this impact. Transaction levels across the industry have therefore weakened further, particularly in recent weeks."

Free UK news agency, Newspage sought the views of property and mortgage experts, below.

4 responses from the Newspage community

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Joe Garner
Founder & Managing Director at Joe Garner Consulting
As mortgage products end, we are likely to see further distressed sales whilst supply remains stagnant due to rising costs for home builders and a failing planning system. If people can’t afford to pay the mortgage, will they sell or cling on for dear life? We have to remember amongst all the data and results published, the core subject at the heart of the matter is people. Families don’t act like businesses when they have children to protect. Forecasting trends as to what may happen is incredibly unpredictable, especially with an uncharacteristically interventionist Conservative Party at the wheel.
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Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
Crest Nicholson is the latest in a line of house builders to offer up much weaker figures than last year and call out the government on their housing policy. Crest are the most overt, saying that a lack of government support has made it more expensive for first-time buyers. They also note the drag caused by higher rates. Neither the Government nor the Bank of England are likely to heed the advice of the house builders, despite both parties having the key to a more successful sector in their hands. Sunak and Bailey are consumed by cognitive dissonance and ignore any criticism.
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Riz Malik
Independent Financial Adviser at R3 Wealth
Crest Nicholson seem to pre-warning the market that their year end figures aren’t going to be rosy and that is no surprise at all. High inflation, high interest rates and economic uncertainty do not make people rush out to buy houses. The question is, how long will this last?
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Ranald Mitchell
Director at bad credit mortgage specialists Charwin Mortgages
The Crest Nicholson figures are unsurprising and it is likely to get tougher for newbuild property developers. With the maturity of many fixed-rate products coming up, there will be an increase in properties listed as homeowners give up on the costs of remaining in their homes, and Court ordered repossessions start to rise. With increased choice and availability of property, as well as more desirable areas to live entering the market, housebuilders will need to work hard to keep their property sales up.