Nov. 11 (Bloomberg) -- Taylor Wimpey Plc, battling to survive the biggest homebuilding slump in 25 years, said U.K. orders have fallen 40 percent and talks to renegotiate its debt have been slightly ``disappointing.''

Taylor Wimpey fell as much as 19 percent in London trading. The order book has declined to a current 6,607 homes in Britain, compared with 11,074 units a year earlier, the London-based company said today in a statement.

There has been an ``increasing downward pressure of pricing'' over the past few weeks as rivals take more aggressive steps to win over customers, Taylor Wimpey said. The builder, which has written down the value of its land and unsold stock by 690 million pounds ($1.08 billion), will have to make further provisions if conditions don't improve, it said today.

``Conditions in the U.K. housing market have remained extremely challenging,'' the company said today. ``We remain of the view that there will not be a recovery in the short term.''

Taylor Wimpey has lost 4.2 billion pounds in market value since its creation from the tie-up of Taylor Woodrow Plc and George Wimpey Plc in July last year, the U.K.'s largest ever homebuilding merger. The stock dropped 19 percent to 10.75 pence in London trading, giving the company a market value of 113 million pounds.

British home sales declined to the lowest level in at least three decades and prices fell for a 15th month, the Royal Institution of Chartered Surveyors said today. Average prices for orders booked by Taylor Wimpey in September and October were as much as 20 percent lower than a year earlier, Chief Executive Officer Peter Redfern said today on a teleconference.

Loan Terms

The builder may breach loan terms as early as February if it doesn't strike a deal with debt holders, Chief Executive Officer Peter Redfern has said previously.

``Our primary focus is on the debt renegotiations, but where we have been approached by providers of equity capital, we will talk to them,'' Redfern said today. ``We are not deep in negotiations with anybody and we don't think it's likely we will raise equity capital in any form before the end of the debt negotiations.''

The company also has the option to sell assets such as land or parts of the business in the U.K., the CEO said.

``With further write-downs to come and until the covenant negotiations are satisfactorily concluded, we advise investors to avoid the stock,'' Robert Gardiner, an analyst at Davy Stockbrokers in Dublin said in a note. Shareholders face a ``significant risk'' their holdings will be diluted, he said.

Debt Rises

Net debt currently stands at approximately 1.9 billion pounds, the company said today. The homebuilder owed 1.7 billion pounds as of June 30.

The homebuilder has closed a third of its U.K. offices, cut 1,900 jobs and scrapped its first-half dividend. Redfern also halted land purchases in the U.K. and suspended a 750 million- pound share buyback program until market conditions improve.

The progress in talks with debt holders has been so far ``a tad disappointing,'' Christopher Rickard, Taylor Wimpey's finance director said today. ``There has been insufficient time to make more progress, but that's not to say progress is not being made.''

To contact the reporter on this story: Scott Hamilton in London at shamilton8@bloomberg.net.

Last Updated: November 11, 2008 11:51 EST