Shares in housebuilders came under pressure as Scottish group Stewart Milne entered administration with the loss of more than 200 jobs.
The business was put up for sale last year but fell through while Lloyds Bank pulled the plug yesterday.
A spokeswoman for the bank said that attempts to put the business on a sounder financial footing had not worked and after several years of support it had made the decision to appoint an administrator.
Teneo, the administrator, said 217 jobs would be directly affected, with hundreds of other sub-contractor roles also expected to be affected.
Milne’s north-west England business is not affected by the administration order.
Stewart Milne, the group’s eponymous founder, said he was devastated by its collapse.
"I tried everything I could to find a way to achieve a better outcome for the business and the people who depend on it,” he told the BBC.
"I believe one of the bids could have delivered a comparable, financial return to administration and, crucially, allowed the business to continue to operate, safeguarding hundreds of jobs and protecting livelihoods."
Shares in Barrat dropped 1.5% to 545p and Taylor Wimpey by 1.6% to 145.9p