Taylor Wimpey shareholders refused last week to back its share placement in a move that sent the stock into freefall. They are now more confident that the company, with a total debt of more than £1.7bn, can ride out a UK economic meltdown. Property sources say deal activity has virtually dried up. Only Bellway and Laing O'Rourke are said to be in the market to buy land.

Additionally, Britain's housebuilders will see at least £3bn wiped off the value of their land assets as a further 1,300 jobs in the sector go this week, according to The Observer.

Statistics calculated by broker Panmure Gordon on behalf of The Observer suggest that if, as expected, the housing market falls by 17.5% seen as a conservative estimate, land values will deteriorate by £3bn. 'It could easily be a billion more if the market turns down further,' says Panmure director Mark Hughes.

Industry sources believe that the slump will create new demands from banks for housebuilders to shore up their devastated balance sheets with fresh capital. At the same time, reports suggest that this week the UK's most profitable housebuilder, Persimmon, will disclose that it is cutting at least 1,000 jobs, a fifth of its workforce. And Kier Residential is to axe 300, 60% of its staff. The news, to be revealed by Building magazine, means the quoted building sector has cut 3,200 jobs in seven days. Last week, Barratt laid off 1,000 staff and Taylor Wimpey cut 900 jobs.