The UK government has handed Vistry £350mn in funding as part of a programme to deliver thousands of new affordable homes, sending shares in the troubled London-listed housebuilder up by more than 18 per cent. The allocation to Vistry, which has been beset by cash flow difficulties, forms part of the government’s £10bn social and affordable homes programme which aims to build more than 70,000 new homes in England over the next decade. The funding is a boost to Vistry, which has been striving to generate cash to pay down its debt pile while battling a wider slowdown in the housing market and facing intense scrutiny over its governance.

Shares in Vistry rose 18 per cent on Tuesday, on course for its best day’s trading on record. The company’s shares were still down 51 per cent in the year to date and 77 per cent lower than their 2024 peak. Vistry has issued several profit warnings over the past two years, following a disclosure in 2024 that it had underestimated building costs.

The company has since overhauled its management structure and sought to tighten costs. Last month it reported a £30mn pre-tax loss for the first half of the year and announced the exit of its chief financial officer Tim Lawlor. The changes followed the installation of new chief executive Adam Daniels in April.

Earlier this month, credit insurer Allianz Trade signalled it was reducing the cover it extends to suppliers of Vistry, which could squeeze the housebuilder’s cash flows. Vistry has been repeatedly praised by Labour’s housing minister Matt Pennycook for its approach to affordable housebuilding. Last year Homes England entered into a joint venture with a Vistry subsidiary, Countryside.

However, opposition parties have raised concerns over Vistry’s troubled finances, and questioned its access to government funding. In March, the Conservatives asked in parliament for reassurances on taxpayers’ exposure to risk and also queried checks carried out by Homes England on liquidity and off-balance-sheet liabilities. Shadow housing minister Paul Holmes warned that ministers should not create “what seems to me to be an uneven playing field that favours one developer”.

In response, Pennycook said it was not the role of Homes England to undertake such checks. Partners such as Vistry are “required to provide financial information, which is assessed by Homes England’s financial due diligence team”, he said. Vistry’s allocation in the government funding announced on Tuesday will be used to build 3,028 homes.

It is one of 33 strategic partners to receive funding as part of the programme. Blackstone-backed Sage Homes and Clarion will also receive £350mn to deliver 2,772 and 2,977 homes respectively, according to Homes England.