There will be little improvement in the mortgage market until 2012, according to a trading update from Telford Homes

The housebuilder’s update also predicted that the slump would hit its profit targets.

The listed company sold 206 homes since April. Open market completions fell to 133 in the first half of the year, down from 224 in the same period last year.

The east London firm said that because of the funding cuts it had stopped buying sites that required social housing grant to be viable.

Telford said it remained cautious in its outlook “in light of the uncertain economic environment and an expectation that the mortgage market would see little improvement before early 2012”.

Telford has bought out the Royal Bank of Scotland’s 50% stake in its Greenwich Creekside development for an undisclosed price, which it described as “at cost”.

Unlike Bellway Homes, which said last week that autumn sales had failed to produce the anticipated returns, Telford gave no sense that recent trading was disappointing. It said: “There has been a steady rate of sales in the past few weeks and performance remains in line with management expectations.”

Last month Building revealed that the usual autumn upturn in housing sales had failed to materialise, according to data from the Home Builders Federation.