Taylor Wimpey has become the first UK housebuilder to be forced into a rights issue to raise capital following a £660m loss on the value of its property.

The housebuilder said it will be writing down the value of its UK property by £550m. It also plans to cut the value of its US property and Spanish property portfolios by £70m and £40m respectively. In a statement Taylor Wimpey said: “It has become apparent that we have entered a significant downturn.”

Shareholders will be asked to help raise £500m in emergency capital to allow the board to put an ‘appropriate financial structure’ in place. Taylor Wimpey has struggled over the past year as the credit crunch has taken hold. The housebuilding industry has seen sales and prices fall and with no sign of increased mortgage availability, challenging times look set to continue over the rest of the year.

Taylor Wimpey is the first of the four big housebuilders to attempt to raise capital through a rights issue but it is also the first of these four to give a trading update. Trading updates from Persimmion, Redrow and Barratt are due in the coming weeks.

A spokesman for the Home Builders Federation told PIN: “The long term outlook for home builders is good, as there is a significant need for more housing to address the under delivery of recent years. However, the current climate for the whole industry is a challenging one, predominantly because of a lack of mortgage availability. The Government needs to take action to reverse the situation in the housing market, as the implications for the wider economy and its own long term housing targets are clear.”