(Reuters) - Persimmon shares fell as much as 8 percent on Monday, after reports on Saturday that Britain's housing minister James Brokenshire is pressing the builder on how it operates within a public funding scheme for new house buyers.
A source told Reuters on Saturday that Brokenshire was "increasingly concerned" by practices at Persimmon regarding the "Help to Buy" scheme.
Persimmon did not immediately respond to a Reuters request for a comment.
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.
Shares of Britain's second largest housebuilder were down 6.4 percent at 23.9 pence and was the top loser on UK's blue chip index.
Shares of other FTSE-100 housebuilders, including Barratt Developments Plc, Taylor Wimpey Plc and Berkeley Group Holdings, were all down more than a percent on Monday.
(Reporting by Samantha Machado in Bengaluru; Editing by Bernard Orr)