Persimmon is believed to be eyeing Taylor Woodrow after it was named as a merger target for George Wimpey, whose two operations completed nearly 22,000 homes last year.
Analysts said the move was aimed more at obtaining building land rather than purely cost savings, but 700 job cuts were planned.
Timber Trade Federation chief executive John White said any company with increased buying power will want to drive down prices.
“However, if a big housebuilder says it will only buy sustainable timber then that would be a great driver of demand in the market,” he said.
