Several leading credit insurers have scaled back their coverage for suppliers to struggling UK housebuilders Crest Nicholson and Vistry, highlighting ongoing difficulties within the sector amid rising costs and weak demand.

According to individuals familiar with the matter, Coface and Allianz Trade have reduced their exposure to Crest Nicholson in recent months, while Atradius has not provided any new coverage for the company for over a year. Coface and Allianz continue to maintain some level of coverage but have been reluctant to extend further credit protection. For Vistry, both Atradius and Coface reportedly ceased writing new credit insurance, while Allianz has also been reducing its coverage, as reported earlier this year.

Credit insurance protects suppliers against potential nonpayment, allowing them to supply goods and services with a degree of financial security. When insurers withdraw or reduce coverage, suppliers may require upfront payments from the affected housebuilders, putting additional pressure on their cash flow.

These changes come amid a challenging environment for UK housebuilders, who have seen the combined effects of supply chain disruptions and higher mortgage rates linked to geopolitical tensions, notably the conflict involving Iran. Such factors have driven construction costs higher and weakened consumer willingness to buy new homes.

Crest Nicholson recently cut its earnings forecast for the second time within four months alongside lowered housing delivery targets. The company is engaged in extended discussions with lenders to amend banking covenants to secure adequate funding and liquidity. Vistry, which has issued multiple profit warnings, is focusing on cash generation to reduce debt, including selling properties at discounted prices and deferring construction work. The company last month announced plans to downsize operations and cut costs after reporting losses in the first half of 2026.

Allianz Trade stated it has “limited exposure” to Crest Nicholson and emphasized that credit decisions are made on an individual basis without blanket sector-wide restrictions. Coface and Atradius declined to comment on the changes in coverage.

Both Crest Nicholson and Vistry maintained that credit insurers continue to provide sufficient cover to support their supply chains and that there has been no impact on their ability to trade. Crest’s spokesperson said discussions with lenders are progressing positively, while Vistry noted no disruptions or supplier withdrawals attributable to credit insurance adjustments.

Meanwhile, Tokio Marine has reportedly begun offering new credit insurance coverage to Vistry, capitalizing on the reluctance of other insurers to extend credit. The company did not respond to requests for comment.

The reduction in credit insurance reflects broader financial stress faced by the UK housebuilding sector as firms navigate a difficult economic landscape marked by cost inflation and softening demand.