Fears that Barratt Developments will write down a quarter of the value of its land and cease its building programme next month sent it to a seven and a half year low. The Times

The lowest level of mortgage approvals since records began weighed on the whole sector, but Barratt, which is the most indebted and is due to give a trading statement on May 15, was affected worst, losing 12p to close at 272.5p.

Alastair Stewart, a Dresdner Kleinwort analyst, told investors that Barratt would take a big write-off, perhaps a quarter of its land bank – or 65% of its net asset value. 'Land-sellers have told us it instigated a total moratorium on land-buying months ago. We do not think there will be a rights issues, but a major restructuring cannot be ruled out,' he said.

All the housebuilders crumbled in Barratt’s wake. Shore Capital piled on the agony, saying that it expected most to follow the lead set by Persimmon, down 21.5p at 581p, and halt new building. Bellway fell 28p to 689p and Taylor Wimpey slipped 4p to 128.25p.