Prowting chief executive Steve Rosier and finance director Bob Templeman resigned last week after the group said sales forecasts for this year had been optimistic and that it was suffering from significant cost overruns on some sites.
The group said its pre-tax profit for the year to 28 February would be well below market expectations.
Analysts now believe Prowting is likely to build about 1300 units this financial year – 200 fewer than initially estimated. The company has cut its own estimate of pre-tax profit from £27m to £15m.
Prowting's share price fell 20p to 118p after the news broke. The Prowting family had been keen to sell some of its shares in the business, but it is unlikely that it will be able to get an acceptable price for its 62% stake in the medium term.
City sources said the family acted quickly to remove Rosier and Templeman when the difficulties became apparent.
Chairman and former Westbury boss Richard Fraser has taken over the day-to-day running of the company.
Prowting's performance has alarmed some in the City, who believe that other housebuilders will disappoint investors when results are announced later this month.
Stephen Rawlinson, an analyst with stockbroker Peel Hunt, asked: "Who is going to be next? Someone is bound to post disappointing numbers – and everyone has their likely candidates."
City thinking is that profit warnings tend to come in waves, and that those to suffer first will be the weakest in the sector. Although the housing market is still strong, it is becoming harder to sell houses.
Two companies, Wilson Connolly and Gleeson, have issued profit warnings and removed their housing bosses since October.