Housebuilders hamper Britain's FTSE

* FTSE 100 down 0.5 pct

* Brexit worries weigh on housebuilders

* IHG falls on downgrade

* SABMiller (Xetra: BRW1.DE - news) rises after AB InBev agrees concessions for merger (ADVISORY- Reuters plans to replace intra-day European and UK stock market reports with a Live Markets blog on Eikon - see cpurl://apps.cp./cms/?pageId=livemarkets for site in development. See the bottom of the report for more details)

By Kit Rees

LONDON, April 15 (Reuters) - British shares retreated on Friday as concerns about a possible British exit from the European Union and stagnation at the top-end of the housing market put pressure on housebuilding companies.

Housebuilders extended their losses from the previous session, with Berkeley Group, Barratt Developments (LSE: BDEV.L - news) and Taylor Wimpey (LSE: TW.L - news) falling between 2.6 percent to 3.7 percent.

The Thomson Reuters UK Homebuilding index dropped 2.3 percent, hitting an 11-month low.

Investors cited concerns around a June referendum, which will decide if Britain will stay in the European Union, and worries about a slowdown in the luxury sector.

"Ahead of Brexit, people have been selling the housebuilders and the pressure will remain until we get the vote out of the way -- that's the main headwind for UK housebuilders," Zeg Choudhry, managing director at LONTRAD, said.

"It (Other OTC: ITGL - news) 's (a) fear of the UK being not the place to invest or ... less competitive outside of the eurozone," he added.

The FTSE 100 index was down 0.5 percent at 6,335.24 points by 1112 GMT, broadly in line with the rest of the European market.

The index dipped from its highest close in 2016, set on Thursday, but remained up 2.1 percent for the week, its biggest weekly rise since February.

InterContinental Hotels Group was also among the top fallers, dropping 2 percent after investment bank JP Morgan cut its rating on the stock to "underweight" from "neutral".

Among the top risers, shares in SABMiller advanced 1.3 percent after Anheuser-Busch InBev agreed concessions with the South African government to secure regulatory approval for its $100 billion-plus takeover of the British brewer.

Outside of the blue-chips, hedge fund manager Man Group (LSE: EMG.L - news) was the top riser among the mid-caps, jumping more than 5.5 percent after some well-received first-quarter results.

The firm posted a slight drop in assets under management in the three months to the end of March, with analysts saying that Man Group had weathered the storm well in a difficult quarter for asset managers.

ADVISORY- Reuters plans to replace intra-day European and UK stock market reports with a Live Markets blog on Eikon (see cpurl://apps.cp./cms/?pageId=livemarkets for site in development). In a real-time, multimedia format from 0600 London time through the 1630 closing bell, it will include the best of our market reporting, Stocks Buzz service, Eikon graphics, Reuters pictures, eye-catching research and market zeitgeist. Breaking news and dramatic market moves will continue to be alerted to all clients and we will continue to provide a short opening story and comprehensive closing reports.

If you have any thoughts, suggestions or feedback on this, please email mike.dolan@thomsonreuters.com.

Mike Dolan, Markets Editor EMEA. (Reporting by Kit Rees, editing by Pritha Sarkar)