Residential building land, one of the core assets of most house builders, plummeted in value by 20% in the first six months of the year and could fall by up to 50pc before the current slump is over.

Research by estate agent Savills shows the value of brownfield sites, down 19.8%, and greenfield sites, down 22.5%, fell by roughly four times the rate of the housing market as investors deserted the sector.

With development land a key part of most housebuilders’ asset bases, the valuations will be a major concern for the struggling sector.

Savills’ director of research, Yolande Barnes, said: 'There are two ways that falling land values affect housebuilders. The first is in pushing down share prices, but the more worrying issue is for those that are heavily indebted and are under pressure from their banks to repay debt. At the moment you have to sell development land at fire-sale prices.'

Daily Telegraph