Telford Homes (LON:TEF) shares sunk on Wednesday, after it warned that pre-tax profits for the six months to September 30 are likely to be lower than last year.

Whilst pre-tax profits stumbled over the last six months, the housebuilder attributed the fall to “development timings which are all on track”. The company confirmed that for the full-year it remained on track, with analysts expecting full-year profits of more than £40 million.

Telford said it had seen “limited” impact from the market uncertainty which has hit the sector in the wake of the European referendum, adding that it has benefited strongly from the “chronic” housing shortage in London.

“There remains an ongoing and acute need for more homes to be built across London which is recognised by all political parties and the Mayor. This is particularly true for non-prime locations where homes can be developed at more affordable prices and rents. The imbalance between this need and the supply of new homes continues to underpin the Board’s long term belief in growing Telford Homes and increasing the Group’s development capacity”, the company said in a statement.

Jon Di-Stefano, Chief Executive of Telford Homes, continued:

“I expect more build to rent transactions as institutional demand continues to grow alongside continuing open market sales at our well located developments. Our ultimate belief in what we do is underpinned by a chronic lack of supply and we expect to deliver more of the homes that London needs in the coming years.”

Shares in Telford Homes are currently trading down 2.08 percent at 399.75 (1319GMT).