Taylor Wimpey, Britain’s biggest housebuilder, has cut its American workforce by a quarter and put aside an extra £61 million to deal with the US housing market crash, but it has softened the pain for shareholders with the promise of a big cash return.

Taylor Woodrow and George Wimpey completed their £5 billion merger in June, but deteriorating markets in California and Florida have forced the company to increase its landbank writedowns in the United States to £81 million this year.

Write-offs and a slump in US sales meant that Peter Redfern, the chief executive of the enlarged group, took over with first-half pre-tax profits to June 30 down by 55 per cent to £140.9 million.

In Britain, Taylor Wimpey’s business appeared more promising, with the order book up 5 per cent at the half-year stage. Despite Mr Redfern giving warning of a “less buoyant” second half, margins were still improving and 80 per cent of projected full-year sales have been booked. There has also been no increase in sales incentives or part-exchanges, suggesting that the recent spate of interest-rate rises has not caused British homebuyers to postpone their house-hunting.

The integration of the two companies was on track, meaning the loss of 700 jobs as forewarned, about 550 of which will come in Britain.

The total savings have been raised by £30 million to £100 million thanks to better discount deals buying materials as an enlarged housebuilder.

Mr Redfern said that it was still too early to call any turnaround in the Florida and California markets. “Since March there has been a credit squeeze that has affected both the sub-prime and the general credit market.” American completions for the full year will be down by at least 20 per cent.

Shareholders will see £750 million of cash returned via a share buy-back over the next 18 months, Mr Redfern promised yesterday. The interim dividend is 5.5p a share, up from 5p.

Home truths

— Home completions for the Taylor Wimpey group totalled 12,228, up from 10,906, with Taylor Woodrow accounting for 4,857 units and George Wimpey building 5,828

— Average sale prices in the former Taylor Woodrow business were up 6 per cent in the first half at £205,000, while George Wimpey recorded a £3,000 rise to £179,000

— Margins on UK housing rose from 11.2 per cent to 14.7 per cent

— Profit from operations before exceptional items in North America fell by 52 per cent to £46.4 million, with revenue down 21 per cent to £353.2 million

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