Builders brace for brickbats from the Square Mile

The extent of the collapse in the housebuilding market will be revealed this week with trading statements from Barratt Developments and Persimmon, two of the sector's big three.

The other giant, Taylor Wimpey, shocked the City last week by failing to complete a £500m attempt to raise funding from shareholders. The board warned that should continued efforts fail or the housing market not improve, at least one banking covenant could be breached next year.

Persimmon reports on Tuesday. In January, it announced redundancies linked to the merger of three regional offices, and the City will be looking for efficiency gains from this move.

Barratt will have a tougher time convincing the market of its stability following confirmation that it made 1,000 workers redundant last week. However, chief executive Mark Clare should announce he has secured £400m of fresh debt to help pay off last year's £2.2bn acquisition of rival Wilson Bowden, as well as improved terms for its banking covenants.

It is also understood Barratt's problems could be eased by the sale of Wilson Bowden Developments, its commercial property arm. Sources said information was distributed last week with a price tag of £220m to £230m. Initial submissions are due later this month.

A related portfolio of industrial properties, mainly in the Midlands and the M11 corridor, is in the second round of bids and should fetch around £90m.

Fears are growing for the industry at large, with speculation that as much as one-third of the total 300,000 workforce could be made redundant.