After a probe was launched by the UK Competition & Markets Authority into eight major housebuilders, analysts said not all the companies were likely to face sanctions, but the watchdog has the power to impose large penalties.
Companies could be fined up to 10% of applicable turnover, analysts at RBC Capital Markets noted.
The CMA said it was launching a new investigation into Barratt Developments PLC (LSE:BDEV), Bellway PLC, Berkeley Group Holdings PLC, Persimmon PLC (LSE:PSN), Redrow PLC (LSE:RDW), Taylor Wimpey PLC and Vistry Group PLC, as well as privately owned Bloor Homes.
Persimmon and Taylor Wimpey were the biggest fallers, down 2.5%, with Bellway, Berkeley and Vistry down around 1.5%, Barratt 1.2% and Redrow 0.9%.
"The number of sites where more than one housebuilder operates in exactly the same local market will be in the minority in our view, and we do not believe that housebuilders can materially impact house prices in ways against the public interest," the RBC analysts said in a note to clients.
"In our view they have more power to cut rather than increase house prices."
They said there "may be a few cases where information about house mix phases have been shared in order to increase the choice of homes built in any one period, but site plans are documents of public record".
However, the RBC team said that there "may be a small number of bad actors who have operated outside of their employer’s own policies and procedures and such instances if found may lead to a penalty fine".
On the new probe, CMA chief executive Sarah Cardell told BBC Radio 4 that the watchdog "don’t believe [sharing commercially sensitive information] is a key driver of the fundamental poor outcomes in this market but it is clearly critically important that all companies comply with competition law".
The CMA also published a report following a one-year investigation of the sector, making several recommendations for governments as it said "significant intervention" is needed.
Analysts at Liberm said they expect this report to most impact "those builders focused primarily on private speculative housing".
Analyst Sophie Lund-Yates at Hargreaves Lansdown noted that concerns raised in the report include poor customer outcomes from the quality of new homes, with faults on the rise over the last ten years, as well as the "overly clunky" planning processes contributing to the under-supply of new homes.
"Seeing rules streamlined could help some of the big listed names shift more houses, but it could also increase competition. The accusations of poor build quality and anti-competitive practice will be of more immediate importance, as findings against either strike could lead to margin degradation in the short term, but this is far from guaranteed," she said.