--- title: "How Labour’s favourite housebuilder became a ‘corporate disaster’" type: "News" locale: "en" url: "https://longbridge.com/en/news/294774761.md" description: "Vistry, once hailed as Labour's preferred housebuilder, has become a 'corporate disaster' with shares plummeting 75% and CEO Greg Fitzgerald resigning. The failure stems from a misguided shift to a partnership model for affordable housing, driven by aggressive US investors who misunderstood the UK market. Issues include board capitulation to excessive executive pay demands, rising costs, red tape, and drying government funding, leaving Vistry heavily bet against." datetime: "2026-08-04T05:53:07.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/294774761.md) - [en](https://longbridge.com/en/news/294774761.md) - [zh-HK](https://longbridge.com/zh-HK/news/294774761.md) generator: "portal-rs" --- # How Labour’s favourite housebuilder became a ‘corporate disaster’ When Greg Fitzgerald unveiled plans three years ago to transform his business Vistry into an affordable housing contractor, it was hailed as a masterstroke. Up until then, Vistry, which trades as Bovis Homes, had been a run-of-the-mill housebuilder, constructing houses and selling them directly to buyers. Now Fitzgerald said Vistry would switch to a “partnership model”, joining forces with housing associations, councils and the Government to build affordable homes using taxpayer-backed funds. With Labour on the verge of power, and the UK pushing forward with plans for millions more homes, it seemed the right move from the well-regarded chief executive, who had risen from a building site tea boy to become a FTSE 100 leader. “So long as the registered providers, local authorities and public rental sector have the funding, there is a great need and demand for new housing from them,” Fitzgerald said at the time. Investors bought into the story. So did Wall Street and shares flew. But three years on, Fitzgerald’s gamble looks to have been a major miscalculation. Vistry shares are down 75pc from £14 to about £3 in the past two years, and Fitzgerald is gone, having resigned in March. And investors think worse is to come. The company is now Britain’s most heavily bet-against stock, with around 20pc of its shares on loan to investors predicting further falls, according to data from the Financial Conduct Authority. Some subcontractors have reportedly been told to down tools to shore up cash. The housebuilder has also turned to discounting homes by more than £100,000 to boost sales and produce more cash. It sold just 6,100 homes in the first half of the year. “It is a corporate disaster of a scale that no one has really wanted to shine a light on,” said one former Vistry insider. “You only need to look at the shares.” Vistry is one of only two private sector providers deemed a “strategic partner plus” for Labour’s £39bn affordable housing fund, leading it to be called “Labour’s favourite housebuilder”. But the Government’s hopes of building 1.5 million new homes by the end of the Parliament are significantly behind, and the state-backed building boom has failed to materialise. Red tape, rising build costs and faltering confidence have all stalled projects across the country and the money Vistry must rely on is drying up. In a sign of its exposure to government policy, shares rose 6pc on Monday after reports that Labour is exploring plans to reintroduce a “Help to Buy” scheme for new homeowners (Vistry still sells homes to private buyers). But as much as Labour’s housebuilding problems could be blamed, behind Vistry’s decline also lies a story that former insiders describe not as bad luck, but a failure that was years in the making. They claim the company’s downfall was built on boardroom capitulation, a strategic overreach and a boss emboldened by his backing from aggressive US investors chasing large financial returns. The roots of the crisis, according to the former Vistry insider, lie in the 2022 merger between the business and rival Countryside Partnerships, which was orchestrated by the British company’s US shareholders. Both companies had a wide range of vociferous and demanding owners: Boston-based hedge fund Abrams Capital, Browning West, an activist shareholder from LA, Jeff Ubben’s Inclusive Capital Partners as well as David Capital Partners. The former insider says the Americans were urging Fitzgerald to replicate the partnership model that makes them a lot of money at home – despite what the insider calls a “lack of understanding” of the UK housing market. “Building multi-storey buildings with a partnerships model isn’t housebuilding. It’s a different animal, it takes different skills,” they said. Insiders recount how Fitzgerald was courted on two fronts: the US investors “effectively worshipped” him and told him he was “the greatest CEO that had ever lived”, while promising him a reward package considerably greater than what he was on at the time. “Greg would have believed all of that, rightly or wrongly. He was a wealthy guy anyway; he didn’t need the cash that they purported to be able to deliver to him, but he certainly bought the vision,” claimed the former insider. Within months of the Vistry-Countryside merger, the company’s US shareholders pushed for a plan for a substantial pay deal for Fitzgerald. This prompted a bitter row inside the remuneration committee, culminating in the exits of two non-executive directors and a senior independent director. Vistry proposed lifting Fitzgerald’s total take-home pay in August 2023, from £3.4m to £5.6m a year, which was 28 times the pay of the average worker. The pay package passed despite some shareholder opposition. “I don’t believe the board and the chairman at the time ... fulfilled their fiduciary duty in saying that was not acceptable,” said the former insider. “They just caved to the Americans.” However, some City sources baulk at the idea that Vistry’s woes were driven by US investors. “Vistry had made multiple bids for Countryside before any US investors got involved in the process,” said one source, adding that the company’s woes were linked to its old business of selling direct to buyers. Others believe Vistry tried to reinvent itself far too quickly than its operational capabilities allowed. “It tripped them up,” says a second former adviser. “They dropped the ball on the commercials, and it was a complete own goal.” A source who used to work for Fitzgerald says: “If there’s a massive structural shortage in social housing that you can address in a capital-light way, you can see that on paper, Vistry’s strategy makes sense. “But it expanded far too quickly, didn’t integrate the regions and there was no line of control. And then one or two of the regions lost the plot and missed their numbers.” A string of profit warnings followed, along with a hefty cladding bill, much of which is being spent on fixing legacy Countryside sites. Fitzgerald, who had added the role of executive chairman to chief executive in 2024, resigned in March, with Adam Daniels – a Countryside Partnerships veteran since 2016 – promoted to chief executive. Although he has served as chief executive for less than four months, the scale of the job in front of Daniels is already clear. The findings of a strategic review that he undertook within weeks of stepping into the role will be published alongside September’s half-year results, which are expected to show a £30m loss. This was announced alongside the exit of Tim Lawlor, its finance chief, last month. Average daily net debt hit close to £800m in the first half of this year, leaving investors anxiously awaiting a trading update that has been delayed to September. It comes amid reports that some are pushing for Labour to nationalise Vistry so that it can deliver Andy Burnham’s mission for the “biggest council housebuilding programme since the post-war period”. Vistry previously denied that any discussions with the Government on the matter had taken place. Questions remain about the substantial undertaking facing Daniels to turn Vistry’s fortunes around. The first former insider says: “It’s not a corporate story to cover in glory. The current CEO has got a hell of a job. “You shake your head in disbelief that a very good business could have allowed pressure from US shareholders and poor performance from the board to put them in this place. I look at it with a huge degree of sadness.” A Vistry spokesman said: “We continue to have confidence in our business model and the strong relationships we have built with our partners over many years. “While current market conditions are challenging for all companies in our sector, we are building at scale and pace, delivering the high-quality homes this country so desperately needs, including over 6,000 in the first half alone. “We have made it clear that we are treating 2026 as a transitional year to improve the execution of our model, while focusing on cash generation and taking decisive steps to reduce debt levels, and we have made significant progress over the past few months.” Browning West, Abrams Capital and David Capital were contacted for comment. Inclusive Capital wound down its funds in 2023, saying at the time that the public markets had not rewarded its focus on sustainable investment. ### Related Stocks - [VTY.UK](https://longbridge.com/en/quote/VTY.UK.md) ## Related News & Research - [Goldman Sachs Reaffirms Their Buy Rating on Vistry Group (VTY)](https://longbridge.com/en/news/297680834.md) - [REG - Vistry Group PLC - SAHP Funding Award](https://longbridge.com/en/news/296870250.md) - [Labour’s housebuilding partner warns on profit after cutting home prices](https://longbridge.com/en/news/286251385.md) - [Vistry shares plummet as housebuilder pauses buyback and warns on inflation](https://longbridge.com/en/news/286219966.md) - [Vistry Group (VTY) Receives a Sell from RBC Capital](https://longbridge.com/en/news/292137960.md) --- > **Disclaimer: This article is for reference only and does not constitute any investment advice.**