Shares of the company fell 4.3% to 290 pence in early trading, with at least one broker raising concerns over the impact on the company's gross margins of the shift away from a straight build and sell strategy.

The company's earnings of 40.1 million pounds were in line with an earlier lowered forecast of around 40 million pounds for the year.

UK builders and developers have struggled in recent months as the economy struggles with a slowdown in European growth and home buyers hold off for fear of further falls in house prices, spurred by the country's chaotic attempts to leave the EU.

Analysts at Canaccord Genuity said shares in Telford were unlikely to perform consistently well due to the company's own forecast of "significantly lower" profit for 2019-20, which it affirmed on Wednesday.

It had warned in February that a deferral of 15 million pounds because of a delay in construction at the City North site in Finsbury Park would eat into its earnings.

As well as Brexit, prices in London have been hit by a combination of tax changes affecting the buy-to-let market, leading housebuilders including Persimmon and Taylor Wimpey to warn of drops in orders or shrinking margins.

Telford Homes, for its part, has looked for refuge in build to rent schemes.

"Whilst we will continue to target owner-occupiers on specific developments and particularly at prices up to 600,000 pounds, sales to individual investors no longer represent a significant part of our future pipeline," Chief Executive Officer Jon Di-Stefano said.

The company said it expects 70% of its development pipeline to be made up of schemes that comprise build to rent homes. For the year to March 31, it made up 31% of total revenue.

These schemes involve houses, generally owned by large institutional investors, designed for renting rather than sale, making them more affordable as they require lesser financial commitment in terms of transaction and financing costs.

Profit before tax for the year was 40.1 million pounds, compared with 46 million pounds a year earlier, the homebuilder said on Wednesday.

(Reporting by Shashwat Awasthi in Bengaluru and additional writing by Noor Zainab Hussain ; editing by Patrick Graham and Rashmi Aich)