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Reuters
Shares of Persimmon, a home builder, fell sharply after the company's continued participation in the Help to Buy program was reviewed.
A source close to Housing Minister, James Brokenshire, said "more and more concerned" by the practices of the company.
These include its use of lease agreements, the quality of its buildings and its leadership.
He added that this meant that his inclusion in the purchase aid was being revised.
The source also said any future government funding program would not support the unjustified use of leases for new homes.
- The trap of ownership affecting thousands
- Leases "unexplained" to buyers
The housing sector has been criticized for practices such as the sale of houses with increasing rental charges, which make them difficult to sell, and for poor quality work.
The leasehold system, which is used most often in apartments, sees landlords impose a lease on land by the landlord, which adds an additional cost to the property in addition to the typical mortgage.
It can also mean that the tenant controls maintenance costs.
Shares in Persimmon fell by nearly 6% Monday morning, and other homebuilders, including Barratt Developments, Taylor Wimpey and Berkeley, were also dragged down.
The minister's source said: "James has become increasingly concerned about Persimmon's behavior over the past 12 months.
"The tenant, the quality of construction, their leadership apparently not allowing them to be accountable to their clients, are all points that have been raised by the Secretary of State privately.
"Since the contracts for the 2021 extension to Help to Buy are being revised, which is overall a great way to help hundreds of thousands of people become homeowners, it would be surprising that Persimmon's approach is not a topic of discussion. "
One of Persimmon's spokespersons said: "Our performance over the past few years reflects the group's success in growing its building volumes to meet UK housing needs, particularly by offering new homes in the UK. attractive prices for new buyers.
"At the end of 2018, we announced a series of new customer service initiatives and we are confident that they will improve our performance once they have had the time to deliver." We are also investing heavily in training to deal with the skills shortage in the industry. "
Analysts in Liberum said that they would be very surprised that Persimmon was excluded from the next phase of the Buy-A-Friend program. They noted that Persimmon was the largest user of the system and that many problems would have been solved.
At the end of last year, the company's boss, Jeff Fairburn, left the company following a dispute over his salary of 75 million pounds.
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