The company said it is seeking temporary relaxation of its banking covenants after a combination of global instability, rising energy and build costs, and weakening buyer confidence dragged its outlook significantly below expectations. Shares fell by as much as 45% following the update, wiping more than £120 million off its market value before closing down around a third.

Crest now expects to complete 1,400–1,500 homes this year, down from previous guidance of 1,550–1,700, after a marked slowdown in new enquiries and visitor levels since March. The South of England has seen the sharpest drop in activity, though the Midlands, South‑West and Eastern regions have held steadier.

Land buyers have also become more cautious, with the group cutting its land sales revenue forecast to around £40m, down from £75m–£100m. Only one land sale has completed so far this year.

Underlying earnings before interest and tax are now expected to fall to £5m–£15m, dramatically below the £32m+ signalled in January. Rising energy prices have pushed up the cost of bricks, blocks and steel, compounding the pressure on margins.

Net debt is forecast to rise to £100m–£120m by year‑end, compared with £38.2m last year and well above the previously guided £15m–£65m range.

The weaker outlook has triggered early discussions with lenders to secure covenant flexibility. Crest said it remains confident in its medium‑term prospects but needs additional headroom to manage the near‑term volatility.

The update comes as the business continues its Project Elevate restructuring programme, which aims to reposition the company towards the mid‑premium market and reduce exposure to volume housebuilding. Recent steps include closing a divisional office, merging the Yorkshire and Midlands divisions, and cutting around 50 jobs.

Chief executive Martyn Clark said the company is acting “quickly and decisively” to prioritise cash generation, reduce inventory and strengthen the balance sheet.

“It is increasingly clear that the current macroeconomic uncertainty is contributing to the prospect of a more prolonged higher interest rate environment, renewed cost pressures and a deterioration in consumer confidence,” he said. “The right and prudent course of action is to adapt quickly and focus on cash and balance sheet strength.”

Crest Nicholson is the latest major housebuilder to warn of the impact of the Middle East conflict and higher borrowing costs on UK housing demand. Berkeley Group has already paused new land purchases, while Barratt Redrow has signalled it may switch to more timber‑based construction if heavy materials become too expensive.

Crest said it no longer expects to make a “material” profit from land sales this year and warned that sentiment among land buyers has “markedly softened”.

Despite the turbulence, Clark insisted the business remains well‑positioned to benefit once conditions stabilise.

“We are doing what needs to be done to navigate this uncertainty to best position the business to deliver the attractive medium‑term opportunity,” he said.