UPDATE 2-Taylor Wimpey sees stability, writedowns hit shares

* H1 writedowns 527 mln pounds, says no more expected

* Pretax pre-ex loss 68.9 mln stg vs loss 0.3 mln

* Sees stronger average selling prices in H2

* Shares fall as much as 5 pct

(Recasts with writedowns, CEO comments, shares, analyst)

By Victoria Bryan

LONDON, Aug 5 (Reuters) - British housebuilder Taylor Wimpey Plc (TW.L) added to improving sentiment in the housing market on Wednesday by saying it saw stability in the UK and United States, although further writedowns dragged its shares lower.

The company, which already wrote down the value of its land and work in progress by just over 1 billion pounds ($1.7 billion) during 2008, announced a further 527 million pounds of land provisions in the UK, North America and Spain, alongside its first-half results.

"Our land is conservatively valued at this point in the cycle and we do not expect further writedowns unless there is a significant shift in any of our main markets," Chief Executive Pete Redfern told reporters on a conference call after the firm reported a wider six-month pretax loss of 68.9 million pounds.

Its shares, which have risen 18 percent over the last month, dropped by over 5 percent and were down 4.8 percent at 38.2 pence by 0755 GMT as the writedowns were higher than expected.

"We had expected more write-offs but not at this stage - we forecast 466 million pounds across 2010," said KBC Peel Hunt analyst Robin Hardy in a note.

Analysts at Panmure Gordon agreed: "Taylor Wimpey's interim results are in line with our expectations from a trading point of view, although the degree of write-downs reported is ahead of what we had expected at this stage," they wrote.

MORTGAGE LENDING

Redfern said there were some signs mortgage lending was gradually improving in the UK and that Taylor Wimpey was confident of opening 40 new sites in the second half.

"We're seeing a stable market and the prospect of potential recovery in UK housing and we see stronger average selling prices in the second half," Redfern said.

Mortgage lender Halifax said on Wednesday house prices in Britain rose 1.1 percent on the month in July, providing further evidence that the decline in housing market activity may be levelling off. [ID:nL5122827]

Britain's housebuilders, including Barratt Developments (BDEV.L), Persimmon (PSN.L) and Redrow (RDW.L), have previously said a lack of mortgage lending was holding back a recovery [ID:nL8683793].

Taylor Wimpey also announced plans to phase out the George Wimpey and Bryant Homes brands over the course of the second half.

The company kicked off first-half results from British housebuilders by posting a pretax loss before exceptional items of 68.9 million pounds, compared with a loss of 0.3 million last year.

After exceptional items, including the writedowns, its loss for the six months swelled to 681.9 million, compared with a loss of 1.42 billion this time last year.

Its net debt at June 30 stood at 1.03 billion pounds, down from 1.53 billion at the end of December after restructuring its debt facilities and raising 510 million pounds through a placing in May. It hopes to reduce debt to below 900 million by the end of 2009. ($1=.5903 Pound) (Editing by Julie Crust and Simon Jessop)