(Reuters) - Shares in British housebuilder Persimmon (LON:PSN) fell as much as 8.3 percent on Monday, after the British government said it was "increasingly concerned" by the company's practices under the "Help to Buy" scheme.
A source close to the minister told Reuters on Saturday that Britain's housing minister James Brokenshire has been pressing the builder on how it operates within a public funding scheme for new house buyers.
The sector has been criticised for practices such as selling houses with rising leasehold charges, which make them hard to sell, and for poor quality workmanship.
"Given that contracts for the 2021 extension to Help to Buy are being reviewed shortly, which overall is a great scheme helping hundreds of thousands of people into home ownership, it would be surprising if Persimmon's approach wasn't a point of discussion," the source said.
Persimmon, Britain's second largest housebuilder, did not immediately respond to a Reuters request for a comment.
Liberum analysts said in a note that it would be very surprised if Persimmon was excluded from the scheme from 2021, as the company is the biggest user of the scheme (by units) and many of the issues cited in the article are now historic.
Shares in the company were down 6.4 percent at 23.9 pence and was the top loser on UK's blue chip index.
They also dragged down shares of other FTSE-100 housebuilders, including Barratt Developments (LON:BDEV) Plc, Taylor Wimpey Plc (LON:TW) and Berkeley Group Holdings.
Persimmon is expected to report its 2018 final results on Feb. 26.