Vistry shares dived nearly 10pc after a major credit insurer cut its cover for suppliers to the housebuilder .

The company fell sharply on Monday after reports that Allianz Trade warned suppliers in recent weeks that it was changing its credit limits for Vistry, which could lead to cover being cut by up to 70pc.

The housebuilder's stock fell by around 9pc during early trading.

The credit squeeze, first reported by the Financial Times, could mean that Vistry faces another squeeze on its cash flow. Under Adam Daniels, its new chief executive, the housebuilder has already resorted to aggressive discounting and slowing down construction to produce more cash to pay down its debt.

Anthony Codling, from RBC Capital Markets, said the market's reaction "suggests that investors are concerned about the potential impacts on Vistry's cash flow and the size and scale of its business going forward".

He said: "If a supplier cannot secure credit insurance and it is worried about getting paid, it is likely to request payment upfront from its customers.

"In Vistry's case, this would put more pressure on its already-strapped cash flow by having to make payments upfront or it may lead to it building fewer homes if it cannot secure the materials it needs to build more homes."

A spokesman for Vistry said: "We are not aware of any supplier withdrawing trade from Vistry due to credit insurance changes and we have seen no interruptions to our supply chain.

"Credit insurers continue to provide substantial cover for our supply chain which more than meets the group's requirements on an ongoing basis.

"We remain confident in our ability to deliver a substantial reduction in average net debt levels in the second half of 2026 and continue to forecast a net cash position in excess of £100m at the end of 2026."

Shares in Vistry have dropped by more than 80pc since August 2024, when it reached a high of close to £14.

The decline comes after an earnings call last week in which Duncan Cooper, the chief financial officer of Travis Perkins, a building supplies company, flagged that credit insurance was being "pulled" from a "fairly significant national housebuilder" as a yardstick for how much pressure the construction industry is under.

He told analysts: "Got a phone call on Friday to say ... a final element of credit insurance had been pulled on a fairly significant national housebuilder.

"These are things we have to take into account and be considerate to. The stress is real."

Sources told the Financial Times that Mr Cooper was referring to Vistry.