Taylor Wimpey has confirmed that it is close to agreeing new debt terms with its banks for its £1.9bn debt.

The struggling housebuilder said today that it has ‘been progressing towards a deferral agreement with our lenders... These discussions are close to completion and we expect to reach an agreement prior to the end of the year.’

It said at its interim management statement last month that it was likely to revise covenant structure with all of its debt providers.

It said today: ‘As previously indicated it is likely that we will breach our interest cover covenants in January 2009 under the original testing schedule for the year to 31 December 2008.

'We have been progressing towards a deferral agreement with our lenders on these covenants.’

It added: ‘We are confident that a robust, stable medium term financing solution for the group, which takes into account the requirements of all relevant stakeholders, will be achieved prior to the announcement of our preliminary results.’