Vistry's departing CEO Greg Fitzgerald painted a grim picture for UK homebuilders, warning of another tough year and weaker profitability. His retirement announcement, coupled with dire predictions about building costs rising 5% due to geopolitical tensions, sent Vistry's shares tumbling to their lowest since the 2016 Brexit vote. The broader sector has struggled, with FTSE 350 homebuilders underperforming both the FTSE 100 and FTSE 250 over the past decade.

Despite the pessimism, several factors could boost the sector. Planning legislation finalized in December aims to streamline approvals, potentially allowing developers to establish new sites more quickly after May's local elections. Affordability has improved as average wage increases of 4%+ have boosted buyers' purchasing power, even as house prices rose only about 2%. The government is reportedly considering new 'help to buy' schemes similar to previous programs that supported first-time buyers.

With housebuilders trading at just 13 times forward earnings, in line with their long-term average, the sector's current valuation doesn't require extreme optimism. Vistry's shares are down 48% while Barratt Redrow has fallen 55%. The potential for eased planning bottlenecks, improved affordability, and possible government support creates a plausible path for recovery. Fitzgerald, who will remain for up to a year during the transition, may yet leave on a high note.