According to analysts, the expected 20 percent drop in UK house prices over the next two years could destroy up to 100 percent of the value of land banks held by Britain’s struggling housebuilders, threatening their survival.

On Monday Royal Bank of Scotland published research predicting a 70 percent fall in land prices, compounding even bleaker outlooks from Merrill Lynch and Cazenove over the past week

The news came as Persimmon prepares to announce that 1,000 staff will lose their jobs in an effort to cut costs. Last week, Barratt said it will cut 1,000 staff, and Taylor Wimpey announced 900 job cuts.

The ever-worsening outlook for housebuilders comes in a week that sees four of the UK’s listed groups publish what are expected to be bleak trading updates. They are expected to include a raft of measures to fend off a deepening crisis of sharply lower volumes and steadily declining prices.

The next few months are about survival. “[Housebuilders will need to strike] the balance between right-sizing and maintaining sufficient scale to take advantage of a recovering market – when it comes.” Cazenove said last week.

Tomorrow will see Bovis and Redrow both update the market, while Barratt Developments will disclose its position on Thursday. Bovis and Redrow are expected to focus on cost-saving measures. Barratt, who slipped out of the FTSE 100 index after losing 95 percent of its value in the last 12 months, have been locked in talks with its banks to secure refinancing. The group is likely to tell the market how successful it is likely to be on Thursday.

Analysts believe only a 20 percent fall in house prices in the short-term will make home ownership affordable again to first time buyers. Cazenove says that “at current levels, homes are still 25 per cent overvalued for first-time buyers, and about 17 per cent overvalued for the market as a whole.”

Merrill Lynch says a 20 per cent-plus decline in house prices over 12 months “has the potential to eliminate all of a housebuilder’s net asset base”.