Two years ago Mark Clare was riding high. He was a director at Centrica and cited as a future chief executive of the £11 billion energy group.

Then he received a phone call from a headhunter to ask if he was interested in becoming chief executive of Barratt, one of the country’s biggest housebuilders. It didn’t take much persuasion and in October 2006 he was in the new job.

Housebuilding was not a sector he knew about but after dealing with the thousands of complaints he received when he ran Centrica’s residential energy business he did know how to manage a business and deal with difficult customers.

Clare, 51, was also a man in a hurry. Just a few months after he joined Barratt, he was negotiating one of the industry’s biggest takeovers when he bought the rival builder Wilson Bowden for £2.2 billion in a deal principally financed by debt.

His acquisition propelled the company into the FTSE 100 and Clare was running his own show, ranked among the elite of Britain’s top businessmen.

It was to prove a short reign. Six months after the deal was completed, the mortgage bank Northern Rock owned up to its financial difficulties. It gave the first hints of cracks in the housing market and signalled that the good times were over.

As a precaution, Clare dusted off a file at Barratt’s headquarters. The company had almost gone bust in the last housing crash in the early 1990s and had kept the DIY manual of how to survive a recession.

Clare opened it up, but little did he know how bad it was going to get. Since that time the group’s share price has fallen 91% and the market value of the combined group has collapsed from £4.4 billion to £300m. At the same time its debts have remained stubbornly high at £1.7 billion and there are now serious questions about the company’s future.

Clare’s career as a chief executive is probably over. Those shareholders who have stayed the course are incensed at the way he has gambled away Barratt’s legacy. For 20 years the company had studiously avoided mergers and acquisitions, but now, in just one deal, Clare has nearly destroyed the company.

How long Clare and his finance director Mark Pain remain at the company lies in the hands of their new chairman, Bob Lawson, who joined this month and has a reputation for rolling up his sleeves at operational level. As one investor put it: “The answer is not very long.”

Barratt is not alone. Taylor Wimpey, which was formed out of the merger of Taylor Woodrow and Wimpey, is in a similar mess. Its share price has collapsed by 82% and its value has fallen from £5.5 billion to £643m. That fall, usually seen only in high-risk technology and biotech stocks, has also cast doubt over the future of its chief executive, Peter Redfern.

A raft of other quoted builders, including Persimmon, which has pulled off a series of deals, are also facing challenging times. They are downgrading their profit forecasts as margins come under pressure and they build fewer homes. Many have stopped buying land.

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