The group is the latest in a series of building companies - including Tarmac and Wimpey - to warn that its profits would be lower than expectations.
But Tay's warning came as more of a surprise to the City, which has viewed the group as one of the better-quality housebuilders, and the mark-down in its share price was more severe. After touching 147p at one point, the shares recovered slightly to close 17p down at 151p.
Tay said it had 'experienced continuing pressure on margins' in the autumn. Although there were early indications of an improvement in the market, its profits would be below expectations. But it said the dividend would be maintained at 5.85p.
Analysts had been forecasting pre-tax profits of between pounds 5m and pounds 7m. Howard Seymour, building analyst at Barclays de Zoete Wedd, downgraded his estimates from pounds 5.5m to pounds 4m, giving earnings per share of 12.1p. In the year to last June, profits before tax fell from pounds 8.3m to pounds 6.1m.
Trevor Spencer, Tay's chairman, said there had been 'a little bit of movement' before Christmas, and this was translating into sales, which meant January was better than expected.
Other housebuilders, estate agents and building societies have reported evidence of an improvement in the housing market since the latest falls in interest rates.Reuse content