Taylor Wimpey, Britain’s largest housebuilder, left the way open for a firesale yesterday after it failed to raise nearly £500 million of fresh funds.

The housebuilder, which completed more than 20,000 homes last year, said that it could not rule out a sale of the business as its share price slumped 42 per cent to 35p. Peter Redfern, the chief executive, said: “There has been a significant fall in the share price, but there are lots of options available to us.”

Taylor Wimpey said on Monday that it was talking to investors about raising £500 million, but yesterday revealed it had failed to find the capital in time for its deadline. Peter Johnson, the finance director, appeared to pay for the failed capital-raising with his job. He will leave at the year end.

Mr Redfern said that the company would continue to talk to its institutional investors and to potential backers and it insisted that there was no short-term cashflow problem. He believed that he had until the end of the year to raise capital, suggesting that the volatility of the stock market this week and two days of poor economic data on housing had scuppered the group’s attempt to raise funds.

Taylor Wimpey will not breach its lending covenants on its £1.7 billion debts until February, but analysts at Dresdner Kleinwort Wasserstein said there was a very real danger that the group could collapse at that point.

To shore up its finances, it said that it was cutting a fifth of its UK staff and closing a third of its offices. The 900 job cuts are expected to involve mainly sales and headquarters staff, but house starts have been put on hold in the face of a 45 per cent fall in reservations. It was reported last night that Texas Pacific Group, the private equity firm, could inject a rescue package.

Taylor Wimpey made a £550 million writedown on its land holdings on Monday on forecasts that house prices could fall by 10 per cent, but yesterday it said that its worst-case scenario was that they would slump by 25 per cent.

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