Taylor Wimpey, Britain's largest housebuilder, dismissed any hope of a rapid recovery in the property market as it plunged into the red and said that its order book had fallen by 20 per cent.

The company, formed almost a year ago after the £5.5 billion merger of Taylor Woodrow and George Wimpey, said yesterday that a £405.5 million pre-tax profit in 2006 had turned into a £19.5 million loss last year. George Wimpey last reported a loss 15 years ago in the last housing market crash.

The profit was hit by £289.7 million of writedowns in the value of its United States business, a slump in the number of homes sold on both sides of the Atlantic and restructuring costs.

The price of its new homes in the US fell on average by 13 per cent last year, but they edged up in the UK by just over 1 per cent, rising £2,000 to £188,000. Pete Redfern, the chief executive, gave warning that prices in Britain would stagnate this year.

“We said in January we expected the spring selling season would be subdued and, surprise surprise, it has been subdued and still is today.

"This is inevitable given what the mortgage companies are doing. Deals are harder to come by and that is not helping first-time buyers. It will take a change in interest rates and a stabilising of the economy before we are back to more normal conditions,” Mr Redfern said.

The company is in the midst of a £140 million savings drive. British suppliers are being asked to take on cuts of about 5 per cent, although in some regions reductions of up to 10 per cent are being sought.

The number of UK homes sold per site, a key measure of underlying performance, fell by about 25 per cent last year. It is selling at 500 locations, 50 more than a year ago, but completions still fell to 20,690 at the end of December from 21,910 the year before.

UK revenue declined by £151 million to £4 billion, although cost savings saw margins improve from 12.8 per cent to 15.2 per cent, which was ahead of target. The order book at the end of last week was valued at £1.34 billion, 20 per cent lower than a year ago.

The proportion of reservations cancelled per week, an up-to-date measure of buyer confidence, improved from the 35 per cent recorded in the autumn, at the height of the Northern Rock crisis, to 18 per cent since the turn of the year, which is comparable with the normal rate.

Mr Redfern said: “We have not seen a marked improvement in visitor levels other than the normal seasonal shift. It is still running at below-normal levels.”

Sales in the US continued to struggle. Last year the company sold 6,740 homes there, down a third. Revenue in the US fell £711 million to £1.2 billion. Group pre-tax profit before exceptional costs fell by 31 per cent to £535.6 million on revenue down 12 per cent to £5.9 billion.

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