Wimpey brand may be axed as housebuilder suffers £1.5bn loss

The debt-laden builder said the UK housing market remained 'very challenging' as it revealed an eye-watering first-half pretax loss of £1.54bn and scrapped the interim dividend.

TW was dragged into the red by a bigger-than- expected £690m markdown of its land portfolio and by writing off the entire value of its intangible assets of £816.1m, which includes the George Wimpey brand.

TW chief Pete Redfern hinted this could lead to it ditching Wimpey from the product portfolio.

Under construction: Falling home sales have hit Taylor Wimpey's balance sheet

He said: 'We haven't entirely decided yet. We are currently using the Wimpey and Bryant brands in the UK and we are not going to change that in the near future.'

He played down the significance of attributing zero value to one of the best known and most historic names in housebuilding, saying: 'Brands in housing do not have an

economic value anyway. We are not making a big song and dance about it.'

Falling home sales and high debts of £1.7bn have put TW in danger of breaching its loan agreements with banks, known as covenants.

The builder (down 4p at 48p) is trying to renegotiate the terms of these agreements, which would buy it some valuable breathing space to sort out its finances.

Despite expressing confidence that a deal will be done with lenders by the end of the year, Redfern admitted TW is on course to breach covenants by February 2009.

Fears of a collapse have sparked an 85pc fall in the group's shares in the past year. The builder is now worth just £506m, a fraction of the £5bn it was worth when Taylor Woodrow merged with George Wimpey early last year.

Since then Britain's housing market has ground to a halt following the collapse of Northern Rock and the onset of the credit crunch.

TW built 8,494 homes in the half, down from 12,228 at the same time last year, and the average selling price in the UK fell 9.8pc to £202,000.

It has closed 13 offices and axed 900 jobs this year in order to cut overheads.

The group has been hit harder than UK-focused rivals, such as Persimmon and Barratt, because it has a large exposure to the US and Spanish housing markets, which have also stalled.