Ibstock, the UK's largest brickmaker, has slashed production by a fifth and issued its second profit warning this year after sales collapsed by more than a fifth during the summer months. The Leicestershire-based company blamed deteriorating trading conditions and criticised the government for delaying support measures for the housing sector. According to The Guardian, the warning signals deepening distress across the construction supply chain as the UK housing market continues to weaken.
This story was first reported by The Guardian.
On 2 November 2026, Ibstock announced that sales had plunged 22% below expectations in the three months to the end of September. The company revealed that UK brick market volumes declined by 17% year on year in July and August, with weakness persisting through September and October. Reuters reported that Ibstock's shares fell 15% to a record low on the day of the announcement, a steeper decline than the initial 8% fall mentioned in early reports.
Joe Hudson, Ibstock's chief executive, acknowledged the sharp deterioration in market conditions.
Trading conditions deteriorated sharply during the third quarter, with weakness continuing into October. We have responded by reducing production to manage inventory, taking further cost action and maintaining tight control of cash. These production decisions create an additional near-term earnings headwind but are necessary to align output with demand.
The production reduction is expected to have a material impact on profitability. According to trading updates, the production cut is forecast to reduce adjusted EBITDA by approximately £6m through lower fixed-cost absorption, compounding the earnings pressure from declining sales volumes. Despite these headwinds, the company maintained its domestic brick market share in the third quarter year on year, and average selling prices remained broadly in line with expectations.
What does the profit warning mean for full-year results?
Ibstock now expects full-year profits to be in the mid-£40m range, a substantial decline from analysts' previous consensus of £59m. This represents a material downward revision and reflects the severity of the market downturn. The company's cost-saving and cash management initiatives are focused primarily on overhead and discretionary spending to preserve liquidity during the extended period of weak demand.
The profit warning arrives days after the Office for Budget Responsibility cut its forecast for new homes to be built by 2031 by 190,000. Angela Rayner, the housing secretary, has acknowledged there is only a
slim chancethe government will meet its goal of building 1.5 million new homes this parliament, with estimates suggesting the target could be missed by a third.
Why is the government's housing support scheme disappointing the company?
Ibstock criticised the government's decision to delay the introduction of the Your First Home support scheme, which is designed to help first-time buyers in England purchase newbuild homes with a 2.5% deposit. The company acknowledged the scheme's potential benefits but expressed frustration at the timing.
The introduction of the Your First Home support scheme represents a welcome and potentially meaningful intervention for the UK housing market, with the potential to improve affordability, stimulate new-build demand and strengthen confidence in future housing supply. While the announcement reinforces confidence in the group's medium-term market outlook, the delay to its introduction until April 2027 is disappointing and has put additional pressure on near-term demand.
The delay means the scheme will not begin supporting demand until well into 2027, leaving the sector without this stimulus during the critical months ahead. Other housebuilders have expressed more optimism about the scheme's eventual impact; Bellway expects the scheme to boost its annual output by around 10%, potentially returning the builder to 10,000 homes per year once the programme is operational.
What is the broader context for the housing market downturn?
Ibstock's warning reflects a wider contraction in the UK housing market. Earlier in 2026, UK house prices fell 0.4% annually in August 2026, marking the first year-on-year decline since November 2023 as rising borrowing costs and geopolitical uncertainty dampened buyer confidence. The average property price stood at £298,468. In the same period, average UK asking prices posted their biggest August drop since 2018, falling 2% as sellers faced increased competition.
Housebuilders have also been under severe pressure. In September 2026, Crest Nicholson warned of a £10m operating loss as UK mortgage rates faced upward pressure from surging bond yields, with the company completing fewer homes than expected amid subdued summer trading and affordability constraints.
What are the company's medium-term prospects?
Despite the near-term gloom, Ibstock has identified potential sources of support for future performance. The company said its strategic land assets, including calcined clay, could support near-term debt reduction. Additionally, Ibstock is completing commissioning at its Nostell facility, which is expected to be finished by the end of 2026. These developments may help stabilise the business once market conditions improve.
Analysts remain cautious about the near-term outlook. Clyde Lewis and Sam Cullen, analysts at Peel Hunt, noted in a statement to investors that
domestically exposed building stocks like Ibstock continue to face very challenging industry conditions. The new Your First Home programme should be modestly helpful next year but lower interest rates remain key to a pickup in sector activity and share prices.
