Crest Nicholson’s banks have begun work on a refinancing deal after effectively ditching plans to sell the housebuilder to Horizon, the listed bid vehicle of the former Pizza Express owner Hugh Osmond

The decision was made following a meeting last Friday of its 24 banks, which bought 90% of the company in a £600m debt-for-equity swap last year.

It is understood a deal would have been up for discussion had Horizon increased its offer of about £335m to closer to £400m.

A source close to the talks said: “There was a shift in strategy after the meeting and the banks are now working on some timetables and different proposals for a refinancing deal.”

Building understands that Morgan Stanley, which is advising the housebuilder on its options, estimates that Crest will be worth between £490m and £600m in three to four years if it refinances and becomes active in the land market.

Talks with Horizon, which began in April, have stalled as the housebuilding market has been hit by fears of a double-dip recession and the drying up of funds from the Homes and Communities Agency. The share prices of listed housebuilders have fallen by between a quarter and a third in the past three months.