The American housing market decline has clearly spread to Great Britain. Taylor Wimpey, the British parent company of Taylor Morrison in the U.S., is writing off £660 million ($1.3 billion) for its land and work in progress, it reported Wednesday.
Roughly £550 million ($1.1 billion) of that figure is attributed to depreciating land values in Britain, the U.K.’s largest builder reported Wednesday. Write downs in North America, which includes Canada as well as the United States, equaled £70 million, and roughly £40 million will come from the company’s other markets, including Spain.
Taylor Wimpey’s losses are likely to put the company into violation of its lending covenants by February of next year, CEO Peter Redfern told investors. As a result, the company is looking for a large infusion of cash. First it looked to its existing investors for roughly £500 million pounds. Now it is looking for new investors, according to Redfern.
“We haven’t talked to everybody yet,” he said. “We are committed to creating a complete solution.”
After Taylor Wimpey’s earnings announcement and acknowledgement that it had failed in its first attempts to raise more capital, the company’s shares on the London stock market closed at a decline of nearly 42 percent Wednesday, from £60 to £35. The stock’s 52-week high was £384.
Orders--or reservations, as the British call them--were down 45 percent in the first half of Taylor Wimpey’s fiscal year in the U.K., while they fell 13 percent in North America. Housing completions in North America were down 30 percent from the same period last year.
Redfern said he thinks the North American market has begun to stabilize. “It’s pretty stable in 90 percent of the markets. … We’ve seen the worst of it. … We think it’s going to be a slow recovery.”
A year ago this month Taylor Wimpey was created when two of Britain’s biggest home builders, Taylor Woodrow and George Wimpey, merged, creating the largest builder in the U.K. At the time, the U.S. home building market had tanked, but the market in the U.K. was relatively stable.

Teresa Burney is a senior editor at Big Builder magazine.