View graphic: Taylor Wimpey's sweeteners to homebuyers

Taylor Wimpey is selling less than half a house a week on each of its sites despite offering incentives with its new homes, it emerged yesterday.

The embattled housebuilder, which is in crunch talks with its bankers, is having to pay home buyers' deposits, take their houses in part-exchange and offer shared-equity schemes as part of a range of incentives. However, the sweeteners have not been enough to prevent sales volumes falling by a third.

Taylor Wimpey made clear the dire condition of the housing market as it reported a £1.55 billion loss, after making two huge writedowns on the value of its land and admitting that it would breach the financial covenants on its £1.7 billion debt by February.

Shares in the builder, which was worth £3.5 billion 12 months ago, fell by 7.2 per cent yesterday to 48p, giving the company a market value of just £549 million. Taylor Wimpey said that its priority was to secure a relaxation of its covenants from a consortium of lending banks, but it dismissed speculation that a deal was imminent.

Peter Redfern, chief executive, gave warning that the UK housing market still had further to fall: “We have not seen the end of it by some way. There will be a tough 12 to 18 months to come.” He said that he hoped to see government intervention in the housing market soon, although he conceded there was “no single magic bullet”.

Improving the availability of mortgage finance was a priority, Mr Redfern said, along with help for first-time buyers. Some sort of reform to stamp duty, to reduce the burden of the tax on homebuyers, would also be welcomed, he said.

But Vince Cable, Treasury spokesman for the Liberal Democrats, yesterday gave warning that a stamp duty holiday would only prolong the agony and potentially make things worse.

He said that any decision to waive the duty amounted to little more than a “bribe” to push first-time buyers into a falling market. Instead, he urged the Government to focus on the much more serious and growing problem of repossessions. “Ministers must act to help the thousands of families struggling to keep a roof over their heads,” he said.

Mr Cable urged Gordon Brown to introduce “mortgage rescue schemes” to allow families struggling with repayments to sell all or part of their house and rent it back from a housing association or private firm.

He also said that councils and housing associations should be allowed to borrow more money to buy up land and empty new homes for use as social housing.

Last year social housing accounted for 15 per cent of Taylor Wimpey's sales, but now represents 24 per cent.

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