Housebuilding shares today closed down 85% on the year, making it the worst 12 months in the sector's history.

The miserable performance won them the unwanted title of the worst performing stocks in London, in a dire year for shares in which the FTSE 100 lost almost a third of its value.

Taylor Wimpey, the heavily indebted group formed from the merger of George Wimpey and Taylor Woodrow last year, suffered most, seeing 93% wiped off the value of its equity during 2008. The company was booted out of the Footsie in March and from the FTSE 250 index in the most recent reshuffle.

The entire housebuilding sector has been hammered by the biggest slump in the property market in three decades. Housebuilders saw off considerable competition for the wooden spoon, with banking stocks also enduring a miserable ride, losing 57% of their value.

Royal Bank of Scotland and HBOS have been hardest hit. Both banks are now members of the 90% club, the tag attached to companies whose shares are worth just 10% of their peak value over the last three years. Rivals Lloyds TSB and Barclays, meanwhile, have lost almost 70% of their value in 2008.

Retailers have not been spared the sell-off as consumers stop splashing out in stores and hoard their cash.

The industry's shares are down 46% on the year and are expected to continue to fall in the coming weeks as tales of woe continue to pour out of the High Street. The January reporting season kicks off for retailers next week, with Debenhams and Marks & Spencer updating the market on trading over the Christmas period.

Miners, the investors' favourite during the start of 2008, have also lost almost half their value this year, as fears of falling demand from China and other developing countries has eaten into earnings forecasts.

One of the few rays of sunshine for investors in 2008 has been the pharmaceuticals sector, which has managed to defy the gloom, gaining 7%. The industry has been boosted by a stellar performance from AstraZeneca, and is traditionally seen as a safe haven for investors in times of turmoil.

Among the top flight, AstraZeneca and British Energy, which is being taken over by French energy giant EDF, are the only two which have managed to remain in the blue in 2008.

After a miserable 2008, analysts are forecasting a better performance in the last six months of 2009. "The stock market will rally in the second half of the year by around 12-15%," David Buik of BGC Partners predicts. "Shares tend to move around six months to a year ahead of the rest of the economy".

Buik also sees something of a reversal in fortunes in 2009 for certain industries.

"Pharmaceuticals will perform strongly for the first 6 months but I expect US President Barack Obama to put the boot into the sector with a swathe of new measures, while I expect retailers to start to recover in the second half of next year," he said.