LONDON, July 2, 2008 (AFP) - Home builder Taylor Wimpey faced collapse after its shares plunged by more than half on Wednesday, having failed to secure a refinancing package to help it weather a downturn to the British housing market, traders said.

The British group, with operations in the United States, saw its shares dive by 54.58 percent to 27.25 pence (54 US cents, 34 euro cents) on London's second-tier FTSE 250 index, which was down 1.16 percent in afternoon trade.

The company added that it planned to axe 900 jobs in Britain.

'We believe there is a very real danger that Britain's biggest housebuilder by volume faces collapse,' German broker Dresdner Kleinwort said in note to clients on Wednesday.

Taylor Wimpey earlier said in a statement that it had been unable 'to conclude a satisfactory transaction' with existing and potential investors over raising new capital.

The firm, which also has operations in Spain and Gibraltar, was born almost exactly a year ago, on July 3, 2007, through the merger of established house builders Taylor Woodrow and George Wimpey.

'Our major markets are experiencing a significant downturn, characterised by significantly lower weekly sales rates and lower average selling prices than in recent years,' Taylor Wimpey said.

'We expect that the UK housing market will remain weak at least through 2008 and we do not anticipate any recovery in the short-term.

'Overall, while our US housing markets remain weak, we believe that they may have stabilised, although we do not anticipate any material recovery until 2009 at the earliest,' the group added.

Taylor Wimpey also said that it planned to close a third of its 39 regional offices in Britain, resulting in the loss of about 900 jobs.

'We expect this to result in a reduction in overhead costs of approximately 45 million pounds on an annualised basis starting from the fourth quarter of 2008. This is consistent with our view that markets are likely to remain weak for an extended period,' the company said.

Britain's is experiencing a downturn to its property market amid high inflation and interest rates in the country, as well as slowing economic growth.

Consumers are also struggling to borrow money from banks for mortgages because of the credit crunch which began in late 2007 in the wake of the US subprime home-loans crisis.

On Tuesday, British home loans provider Nationwide said the average price of a property in Britain had fallen by 0.9 percent in June from May, when it had reported a fall of 2.5 percent.

Taylor Wimpey had announced on Monday that it was looking at raising cash by offering new shares in the company, following weekend reports that it was seeking 500 million pounds (629 million euros, 994 million dollars).

George Wimpey, named after its founder, was born in 1880 as a constructor of major buildings in London using stone. It began making houses in 1919.

Taylor Woodrow started life in 1921 after teenager Frank Taylor joined forces with his uncle Jack Woodrow to build houses in northwest England.