Shares in Crest Nicholson PLC (LSE:CRST) subsided 9% after the housebuilder warned of a £15 million provision to cover build defects in four legacy projects, with consultants appointed to examine for other potential defects.
Along with the four sites, which were completed prior to 2019 when the London & Regeneration business was closed, the consultants will also look for potential problems with other pre-2019 sites.
UBS said the appointment of consultants "means there could potentially be further costs identified".
House completions for the year to October are now expected to reach 1,800-2,000, compared to last year's 2,020 homes.
Overall build cost inflation has "largely stabilised and at a level lower than prior year", the FTSE 250-listed group said, with sale prices in line with expectations so far.
UBS said the shares trade at a steep discount to tangible net asset value "reflecting low returns and continuing execution and legacy issues. We expect share to react negatively to the announcement of further legacy provisions".