Taylor Wimpey has failed to agree a deal with shareholders and potential new investors, forcing the stricken housebuilder to admit on Wednesday that it could breach banking covenants if the housing market does not recover.

The shares fell 47.5 per cent to 28½p in afternoon London trading. Other builders were also hit, with Barratt Developments down more than 30 per cent to 39½p and Persimmon losing almost 17 per cent at 242¾p.