Housebuilder Taylor Wimpey has reported that its first-half underlying profits have slumped 96% to £4.3 million, compared to £119.8 million in the same period last year.

The London-based company said it has £1.54 billion in writedowns, after writing off £690 million from the value of its land bank and another £816 million in relation to the merger of Taylor Woodrow and George Wimpey last year.

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In a statement Taylor Wimpey said: "Constructive discussions with the relevant lenders are ongoing and management is of the view that a satisfactory conclusion will be reached."

The UK's biggest housebuilder has already axed 900 staff and closed 13 of its 39 regional offices.

The firm, which operates in the UK, US and Spain, also said average selling prices of houses in the UK dropped by 10% during period.

Chief Executive Pete Redfurn said: "While conditions are likely to remain tough in both the UK and the US in the short term, we are maintaining momentum in the UK and we have seen pockets of stabilisation in the US."

(CD/JM)