LONDON, Nov 22 (Reuters) - Shares in British housebuilders tumbled on Wednesday after the government said it would reclaim land that was not developed quickly enough, potentially hitting future profits.
Britain’s biggest housebuilders, which include Berkeley , Barratt, Persimmon and Taylor Wimpey , have been accused in the past of sitting on land to restrict the number of properties they build to drive up house prices.
Finance minister Philip Hammond set out a raft of measures in his annual budget to boost the housing market on Wednesday, including a review of the gap between the number of planning permissions granted and the housing developments that begin.
“(It) will deliver an interim report in time for the Spring Statement next year,” Hammond told parliament.
“And if it finds that vitally needed land is being withheld from the market for commercial, rather than technical, reasons we will intervene ... using direct intervention compulsory purchase powers as necessary.”
Shares in the four big builders fell between 1 and 3 percent in afternoon trading, the biggest fallers on the FTSE 100 Index.
“If you are suddenly getting a flood of properties or land banks being used in the short term, the market might think it could depress prices,” said Paul Mumford, UK fund manager at Cavendish Asset Management.
Housebuilders deny sitting on land, and analysts at Jefferies said that previous reviews had found so-called land-banking to be a myth. “We suspect that this one will too; we suspect that will be confirmed in the Spring statement in 2018.”
The Spring statement is normally delivered in March.
Reporting by Kate Holton; editing by Stephen Addison