Housebuilders have rejected accusations that they were holding on to land to ramp up profits – after their shares took a pounding following a Budget crackdown.

Britain's biggest developers languished at the bottom of the FTSE 100 index after the Chancellor unveiled £44billion reforms designed to boost construction.

However, along with capital funding, loans, guarantees and a plan to scrap stamp duty for the majority of first-time buyers, investors got jittery over Philip Hammond's pledge to crack down on land banking.

The Government said that it would intervene when it had found that developers had been granted planning permission for new housing, but then failed to build it.

Britain's biggest developers languished at the bottom of the FTSE 100 index after the Chancellor unveiled £44bn reforms designed to boost construction

The big names have long been accused of storing up empty plots to push up prices. Last night, among the four FTSE giants, Barratt Developments was down 3.7 per cent, Berkeley Group fell 2.6 per cent, and Persimmon dipped 1.9 per cent.

It prompted a fightback from housebuilders who said that it was reform to the planning system that was needed.

Stewart Baseley, executive chairman of the Home Builders Federation, said: 'As has been proved by numerous independent investigations in the past, housebuilders do not land bank.

'Housebuilders have nothing to fear from a review of land banking and if it identifies non-housebuilders sitting on land and brings that forward for development, it would be a positive move.

'Any review should also focus on why so many plots that some suggest are in a 'land bank' are mired in the planning system, and identify ways to process them more quickly so they can be built.'

The companies have faced constant accusations that they have caused property prices to increase by buying land and failing to build on it. The big names have argued that it was planning red tape that delayed plans

Earlier this year, the Mail revealed how developments were being delayed for years by councils. In one instance, when Redrow won permission for 110 homes in Bristol in 2015, it was faced with 40 demands from the council.

These included putting fences around silver birch trees, getting approval for cycle paths and building bird and bat boxes.

In his Budget speech the Chancellor announced he would begin a review of the planning system and authorise powers to take back land that had been awarded planning permission but had not been built on. He said this could include compulsory purchase orders.

Investors took this as a threat to the builders who have seen their profits soar as property prices have rocketed.

Some were helped by the speech, as the Office for Budget Responsibility predicted that the Chancellor's reforms would boost house prices by 0.3 per cent.

As a result, estate agents rose steeply. Countrywide, Britain's biggest agent, increased 2.5 per cent, while Foxtons climbed an impressive 6.64 per cent.

Alan Brown, chief executive of builder Cala Group, said: 'The idea of yet another review into whether housebuilders are land banking is incredible.

'Wherever we have a planning consent, we get on and build as quickly as we can, as tying up lots of capital in large swathes of land with no houses on them simply isn't in our financial interests.

'Instead of launching into another bout of navel-gazing, the Chancellor should have done more to unpick the logjam that exists at a local authority level – where planning departments remain under-resourced and planning continues to be used as a political football, resulting in excessive planning delays.'

Housing analyst Anthony Codling, at Jefferies International, said: 'Once again, history has taught us that history teaches us nothing. A new team and inquisition into land banking.

'Every previous inquisition has found that land banking is a myth, and we suspect that this one will too.'