Crest Nicholson reports a 60% fall in pre-tax profits for the half year.

The UK housebuilder warns of a continued slowdown in the housing market as rising mortgage rates and cost of living pressures impact demand.

The company’s adjusted pre-tax profit for the six months to end of April stood at £20.9m, down from £52.5m for the same period a year earlier.

Crest Nicholson chief executive Peter Truscott comments:

“We started our first half amidst the worst of the economic uncertainty arising from the September 2022 mini-budget. Rapidly falling consumer confidence and rising interest rates immediately translated into softer demand in the housing market”.

“At the time we outlined that, with a package of sensible measures to restore economic stability and trust, the market would remain resilient and this has proven to be the case.”

Truscott explains that 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”.

He concludes: “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.”