Ibstock, the UK’s largest brickmaker, has issued a significant profits warning as weak construction demand adds to concerns about the country’s housebuilding sector. The company said sales in the third quarter were 22% below expectations and announced a one-fifth reduction in production volumes compared with plans outlined in August.
According to industry data cited by Ibstock, UK brick market volumes fell 17% year on year in July and August. The company now expects its earnings for 2026 to be in the mid-£40m range, compared with City expectations of almost £60m.
Ibstock’s shares fell 11%, reaching a level close to their lowest since the company returned to the stock market in 2015. The warning suggests that the slowdown affecting housebuilders is continuing rather than easing.
Housebuilders have responded by emphasising financial discipline, including tighter cost control and reduced expansion. Berkeley Homes, which operates mainly in south-east England, said six months ago that it would stop acquiring land and hiring new employees.
The sector is also facing higher borrowing costs and the burden of building regulations, while new-home prices have remained broadly flat. Ibstock chief executive Joe Hudson said the delay before the government’s Your First Home scheme launches could weaken demand in the meantime, as eligible buyers may wait for the discounted loans to become available next April.
The scheme has been welcomed by housebuilders, but transaction caps are intended to limit its impact on prices. The government has also said there will be no further changes to building regulations during the current parliament unless required for critical safety reasons, although existing rules will remain in place.
Peel Hunt described Your First Home as likely to be “modestly helpful”, while arguing that lower interest rates will remain the main factor needed to revive activity. With the Office for Budget Responsibility forecasting 1% economic growth in 2027, the outlook suggests that housebuilding volumes may not improve substantially in the near term, putting further pressure on the government’s ambition to deliver 1.5 million new homes during the parliament.
Sources: The Guardian Business.