Schroders, Bovis’ biggest shareholder, wrote to Berkeley proposing an all-share merger following a difficult trading period for Bovis which claimed the scalp of its chief executive David Ritchie.

Bovis had issued a surprise profit warning at the end of 2016, saying that pre-tax profits were likely to be flat this year at between £160m and £170m, below analyst predictions of £180m, due to a slowdown in the rate of building and sales in December.

The string of events prompted Schroders to target a merger with Berkeley, which mostly builds homes in London and the South East. Bovis’ activity is also concentrated on that area.

But Berkeley sources said the company had dismissed the call, instead choosing to concentrate on growing through partnerships with the likes of the National Grid, with whom it signed a £700m joint venture to develop new homes on disused land owned by the power provider in 2014, rather than mergers.

Other housebuilders, such as rivals Redrow or Persimmon, could still be in the frame to buy Bovis, which has struggled in recent months with slowing sales of its homes amid wider market uncertainty.

Berkeley itself has not been immune to a slump in the market: last month it amended its five-year dividend plan to return some cash through share buybacks instead. It also said in December that the number of reservations for its homes had fallen by a fifth since the referendum, signalling the impact of the slowing London property market on the company.

It hit out at Government policy which it said was increasing demand rather than supply, saying while it had helped in some areas, it was having “a negative effect on the capital”.