Telford Homes (LON:TEF) warned of the impact of Brexit uncertainty upon housing demand on Wednesday.
The house builder said that an increasingly stagnating London property prices, alongside continued Brexit-related uncertainty had been having a negative impact upon the housing market.
Specifically, house prices in the capital have fallen sharply compared to the rest of the UK.
Average London house prices fell 0.7 per cent in the year to July, marking the third month of decline according to figures from the Office for National Statistics (ONS).
According to the trading update, Telford Homes said its interim results would show will fewer completions in the first half of the year to 31 March 2019 than in the following six months.
Pre-tax profits for the first-half of 2019 will therefore be lower than the second quarter.
Nevertheless, the company said it expects to ‘exceed the £8.7 million achieved in the six months to 30 September 2017.’
The interim dividend is also set to increase in response to growth.
Jon Di-Stefano, Chief Executive of Telford Homes commented: “Our key objective is to fulfil the ongoing demand for the homes that London needs. Notwithstanding the uncertainty surrounding the outcome of Brexit, the Group continues to perform well and is focused on increasing the scale of the business driven by the need for homes at affordable price points, in particular in the rental sector.”
Looking ahead, Di-Stefano remained optimistic. He added: “We remain confident that our approach to forward sales with increased visibility over profit recognition enhanced by our success in build to rent will enable us to deliver strong long term returns to our shareholders.”
The warning sent Telford shares down more than 13 percent.
The company was founded back in 2000, and is currently listed upon the AIM-market of the London Stock Exchange.
The company specialises in developing housing in the capital.
Shares in Telford Homes are currently trading -7.62 percent as of 12.43PM (GMT).