UK's Vistry upbeat on 2024 as demand for affordable homes picks up

Says current forward sales up 12.4% year-on-year

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Sees 2023 pretax profit ahead of its forecast

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Mid-cap housebuilder stays active in land market

Jan 12 (Reuters) - British home builder Vistry on Friday struck a more optimistic tone than its sector peers, saying the reduction in mortgage rates in recent weeks would underpin demand in 2024.

After a tough 2023 as interest rates rose to curb inflation, Britain's housing market is set for a boost as home loan rates start to fall back, although broader economic worries could temper any recovery.

Vistry pointed to "good levels" of demand for affordable homes from registered providers and local authorities, and a notable increase in demand from the private rented sector in the December quarter that continued into the New Year.

The builder, which last year shifted its focus fully onto building affordable homes by working with local authorities and housing associations, said the transition of its land bank was progressing well.

"The process of becoming fully focused on Partnership housing has got off to a good start despite market conditions," Peel Hunt analysts wrote in a note.

Vistry, one of the largest housebuilders in the UK by number of homes built, said forward sales - a key industry measure which gauges near-term demand - was up 12.4% on the prior year.

The group said it expected to report 2023 adjusted profit before tax ahead of its forecast of 410 million pounds ($523 million). Analysts on average were expecting a profit of 400.9 million pounds, according to LSEG data.

Vistry's shares rose around 2% in early trade.

Unlike its peers, the FTSE 250 firm remained active in the land market despite the market uncertainty during 2023, securing 13,067 plots, up about 53% on the prior year.

Vistry sounded slightly more encouraging than its mid-cap peer Persimmon and FTSE 100 rival Taylor Wimpey, which earlier this week were both cautiously optimistic about near-term prospects and tight-lipped on their profit outlook and build targets for this year.

The company also said Ralph Findlay would step down as chair after its annual general meeting in May and Greg Fitzgerald would take up the role in addition to his CEO responsibilities.