SHARES in the Bournemouth-based retirement home builder McCarthy & Stone slumped yesterday after the company said it would be hit by a new government policy.

The company said it would be affected unfairly as the government seeks to clamp down on unnecessary leaseholds and ground rent charges.

Communities secretary Sajid Javid announced a ban on the sale of new-build leasehold homes. Ground rents will be set at zero for new long leases on houses and flats, while the government will work with the Law Commission to support existing leaseholders and make it easier to buy a freehold or extend a lease.

However, McCarthy & Stone is seeking an exemption for retirement housing providers. It makes money from charging home-owners ground rent and then selling on the freehold to third-party investors.

The firm said the practice was expected to glean £33million in profits next year, which are now at risk.

The company insisted it does not build leasehold houses and does not employ the types of "escalating ground rents" that have caused concern.

Chief executive Clive Fenton said: "The proposal to set all ground rents to zero will result in a disruption of housing supply and contradicts the government's stated objective of seeking new sources of housing.

"We understand and support the need for action to address leasehold housing and aggressive escalation clauses for ground rents; however, this blanket approach will result in reduced housing delivery as well as choice for ordinary people.

"We are disappointed that our representations on this topic and those submitted by others within our sector have not been directly reflected in the government's response."