Taylor Wimpey and Redrow are expected to take the rare step of writing down their most valuable assets, a move few housebuilders have been forced to take since the recession of the early 1990s. Speculation is rife that Barratt Developments may have to follow suit when it updates the markets next week.

Analysts say the fall in property prices and the dramatic decline in mortgage approvals will leave many housebuilders with little choice but to significantly write down the value of their land assets, particularly those firms that aggressively acquired plots in the 12 months leading up to the credit crunch.

Keith Bowman, equities analyst at Hargreaves Lansdown stockbrokers, said expectation is mounting in the City that Taylor Wimpey and Redrow will be the first to announce substantial writedowns when they update the markets on Wednesday and Thursday.

Another leading analyst, who asked not to be named, said Redrow has already started to examine how a potential writedown might work.

He said the move marks a turning point in the sector, and it mirrors the desperate steps taken by housebuilders during the last recession.

"Until very recently if you mentioned the word writedown to a housebuilder you'd get a punch on the nose. It's now highly possible that both Taylor Wimpey and Redrow will do it. Redrow because they, like any housebuilder, have been openly discussing the mechanics of how a writedown might work. Taylor Wimpey has made writedowns in the States already, so they have already crossed that particular Rubicon."

Taylor Wimpey wrote its US land bank down by £283.4m in March.

The analyst added that although most companies would rather opt for one large writedown, their auditors are likely to push them into several phased asset devaluations over the course of the year.

"Most of the companies that consider a writedown would like to get as much as possible over and done with, but they have got a certain resistance from their auditors," he said.

Concerns are also growing that several firms, in particular Taylor Wimpey and Barratt, whose net debts now exceed their market values, will be forced to raise extra funds over the coming months. They are likely either to go to shareholders for cash by announcing a rights issue, or to pursue debt-for-equity swaps.

Mark Hughes, an analyst at Panmure Gordon, warned in a research note: "There are three fears: writedowns, rights issues and debt-for-equity swaps."

Alistair Stewart, of Dresdner Kleinwort, predicts Barratt will have to raise at least £1bn if it is to survive the downturn.

Merrill Lynch analysts argue Taylor Wimpey may have to cut its dividend.

But Ken Ross, chief executive of Elphinstone, said any measures housebuilders may be forced into over the next six months are only likely to be temporary. He said that in Scotland especially, there is still a shortage of land to meet the country's housing needs.

"That (writedowns] is a very short-term reaction to the current situation. There is still an underlying shortage of land."