By Suban Abdulla and Aby Jose Koilparambil
(Reuters) -British homebuilder Vistry Group (LON:VTYV) on Thursday joined its bigger rivals in flagging an intensifying slowdown in the housing market, but retained its annual profit forecast citing resilient demand in its affordable homes business.
The FTSE 250 firm works with local government authorities and housing associations to build a affordable homes through its Partnerships business, and is typically better able to insulate itself against broader market shocks thanks to high demand for such housing.
It said it expects adjusted pre-tax profit for the year ending Dec. 31 to be over 450 million pounds ($581.36 million), at least 8% higher than a year earlier.
"Partnerships is demonstrating its resilience and remains on track to deliver revenue growth in the full year," Chief Executive Greg Fitzgerald said in a statement.
Vistry added bulk transactions across its businesses had also helped. Its shares were up 2.2% as of 0902 GMT.
Higher interest rates have hit housing demand and building rates as the Bank of England battles the highest inflation levels among large, rich economies, prompting warnings from housebuilders.
Vistry said its Housebuilding business, which is similar to its rivals' operations, had faced "more challenging market conditions" in the half-year period, with the tougher environment particularly impacting first-time buyers.
Swap rates - a metric used by lenders to price mortgage borrowing costs - fell significantly on Thursday and housing stocks rallied after consumer price inflation dropped by more than expected, prompting investors to scale back their bets on future rate hikes.
Vistry, one of the biggest British housebuilders in terms of annual homes built, said its weekly sales rate for the half-year to the end of June rose marginally to 0.86 units per site from 0.84 in the comparable period a year before.
It said its Housebuilding division delivered 2,847 completions in the period, which it described as being down 22% on a pro forma basis.
Britain's biggest homebuilder Barratt Developments (LON:BDEV) and high-end developer Berkeley Group have both forecast an about 20% slump in their annual home sales.
($1 = 0.7741 pounds)