Britain's FTSE boosted by Barclays, but budget hits builders

* FTSE 100 closes up 0.9 pct

* Housebuilders, estate agents under pressure after budget

* Standard Chartered (HKSE: 2888.HK - news) falls as China turmoil continues (Adds detail, updates prices)

By Liisa Tuhkanen and Alistair Smout

LONDON, July 8 (Reuters) - A rally in Barclays after a management shake-up helped Britain's top share index gain on Wednesday, but housebuilders took a hit from reforms introduced by finance minister George Osborne.

The FTSE 100 closed 0.9 percent up at 6,490.70 after posting its lowest close since mid-January in the previous session.

However, London-exposed housebuilders and estate agents tumbled after Osborne said the government will tighten "non-dom" tax rules and abolish the status which gives tax advantages to people officially domiciled abroad and has caused controversy for years.

Barratt Development, Persimmon (Other OTC: PSMMF - news) and Taylor Wimpey dropped between 5.7 and 4.7 percent, making up the top three FTSE 100 losers.

"Property developers who specialise in selling to non-dom purchasers may find that the Budget announcements may dampen demand until the details have been fully absorbed," said Gary Richards, partner at City law firm Berwin Leighton Paisner.

However, the budget -- which also saw Osborne cut welfare spending, trim corporation tax and ease income tax bill -- was broadly seen as business friendly, CMC (Shanghai: 600327.SS - news) market analyst Jasper Lawler wrote in a research note.

Among the gainers, Britain's biggest defence contractor BAE Systems added 3.5 percent after the government said it would commit to NATO's defence spending pledge for the next five years.

Barclays (LSE: BARC.L - news) was also one of the top gainers, rising 2 percent after ousting its chief executive. The lender surprised markets by saying that Antony Jenkins would leave and a search for a new chief executive was under way, in an attempt to accelerate strategic change and boost shareholder returns.

"While a period of uncertainty until a successor is found would usually be a negative, the positive share price reaction suggests optimism that the replacement can better satisfy the board on the financial performance and strategic change front," said Mike van Dulken, head of research at Accendo Markets.

The banks received a boost after Osborne said he would reduce a levy charged on the assets of financial institutions and replace with it with a surcharge on bank profits. However, the rally soon calmed down, with Britain's stock market index of banking shares down 0.2 percent at the close.

Among fallers in the banking sector, Standard Chartered closed 1.5 percent lower. The Asia-focused lender came under pressure after Chinese stocks plunged, with the country's securities regulator warning investors were in the grip of "panic sentiment".

The FTSE 100 is still some 9 percent below an all time high hit in late April, with the Greek debt crisis having knocked appetite for equities across the continent.

Euro zone members have given Greece until the end of the week to come up with a proposal for sweeping reforms in return for loans that will keep the country from crashing out of Europe's currency bloc and into economic ruin. (Editing by Toby Chopra)