UK's FTSE stumbles near record highs as housebuilders weaken

* FTSE falls but remains near record highs

* Housebuilders hit by Labour Party's rent control plans -traders

* HSBC rises on Sunday Times report of UK retail bank spinoff

By Sudip Kar-Gupta

LONDON, April 27 (Reuters) - Britain's top equity index slipped lower on Monday, with traders citing plans by the UK's opposition Labour Party for rent controls as causing a pullback in house building and property stocks.

House builders such as Taylor Wimpey (LSE: TW.L - news) and Barratt Development were among the worst performers on the blue-chip FTSE 100 index, which was down 0.4 percent at 7,044.47 points.

The Labour Party said on Sunday it would introduce rent controls if it won an election on May 7, and ban private landlords from raising rents by more than the rate of inflation for the duration of new three-year contracts.

Traders said such proposals could cause a slowdown in the housing and property market, which in turn was contributing to the drop in house builder stocks on Monday.

The FTSE remained near record highs of 7,119.35 points reached earlier this month, but some traders said uncertainty ahead of the election would prevent the UK stock market making major gains in the near term.

"We're up around these record highs, so it doesn't take much to get people to hit the 'sell' button to cash in some profits," said Central Markets trading analyst Joe Neighbour.

Opinion polls put the ruling centre-right Conservatives neck-and-neck with the centre-left Labour Party, while the Scottish National Party (SNP) could emerge as the third-biggest party and possibly hold the balance of power.

Traders also cite uncertainty stemming from the Conservatives' promise to hold a referendum on Britain's membership of the European Union by the end of 2017, if they win.

On the positive side, Europe's biggest bank, HSBC, rose 2.7 percent after the Sunday Times reported that it was weighing plans to spin off its British retail bank in a 20 billion pound ($30 billion) deal.

The rise in HSBC also dragged up the shares of rival bank Standard Chartered (Other OTC: SCBFF - news) . HSBC declined to comment on the Sunday Times report.

The FTSE 100 index remains up around 7 percent since the start of 2015. (Editing by Kevin Liffey)