Taylor Wimpey, Britain’s largest housebuilder by production, said that it would take a £550 million write-down on the value of its British land holdings and confirmed that it would tap its largest investors for hundreds of millions in cash to stay afloat.

The housebuilder, grappling with £1.9 billion in debts, also said that it had asked its banks to change its covenants. The company has a market value of only £650 million.

In addition Taylor Wimpey, whose half-year ended yesterday, said that it would mark down the value of its land in the United States by £40 million, bringing its total US writedowns over the past 18 months to £323.4 million. The value of its Spanish housebuilding division is being cut by £70 million.

George Wimpey, which merged in July last year with Taylor Woodrow, last wrote down its UK land holdings in 1992 by £37 million when it was building a few thousand homes annually. Last year Taylor Wimpey sold 20,690 homes in Britain and 27,642 in total.

The company, which is due to release a trading statement tomorrow, is expected to ask shareholders for between £400 million and £500 million through a share placing to bolster its faltering balance sheet.

Taylor Wimpey said: “The board is moving proactively to put in place an appropriate financial structure that will withstand what we expect will be a sustained weak market in the UK and provide a base for future growth.”

It is understood that the company has already approached its largest shareholders, including Alliance Bernstein, Toscafund Asset Management, Standard Life, Barclays, Legal & General and M&G, about supporting the fundraising exercise.

Taylor Wimpey is thought to have received approaches from private equity firms that have been circling the housing industry in the past few months.

Barratt Developments, Britain’s second-largest housebuilder by production, is close to securing a rescue refinancing that will relax its banking covenants, it was reported last night.

Barratt, which could not be reached for comment, will give a trading update on July 10. Last month Mark Clare, the chief executive, said that writedowns on its land bank would be limited. He said in May that an outline agreement for a £400 million refinancing had been struck and that the company hoped to complete the deal by its June 30 financial year-end. Barratt shares closed down 5¾p at 58p, their lowest since September 1992, valuing the company at £221 million, compared with £3.8 billion a year ago.

Barratt took out a £600 million short-term acquisition finance facility last year to help it to buy Wilson Bowden, a rival. This is due for repayment on April 25 and the Barratt board hopes that the new finance facility will give it another two years – until mid2011 – to repay £400 million. Talks with Royal Bank of Scotland, HSBC, Lloyds TSB and Barclays are continuing.

Redrow, another housebuilder, which was due to issue a trading update on Thursday, has delayed its statement until next Wednesday.

Home truths

3.2% Fall in house prices compared with June 2007

10 number of weeks it takes to sell a home, two weeks longer than at start of year

91.6% Sellers are being obliged to accept 91.6% of asking price, down from 93.5% six months ago

Source: Hometrack

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