Official data showed a surprise dip for construction in July, reversing a bounce seen in June, after the biggest annual fall in house-building in more than two years.
Construction output fell by 1.0 percent on the month, bucking economists' forecasts of a 0.5 percent pick-up after an unrevised 0.9 percent rise in June.
Taylor Wimpey (>> Taylor Wimpey plc), the residential housebuilder, fell 1.5 percent, as did real estate firm British Land Company (>> British Land Company PLC), down 1.6 percent.
That followed the publication of two surveys on Thursday saying British house prices rose strongly in August, pushed up by a lack of property coming onto the market.
Britain's FTSE 100 <.FTSE> was down 0.3 percent at 6,135.51 at 1432 GMT, broadly in line with other European indexes, with investors displaying caution ahead of a U.S. Federal Reserve meeting next week to make a decision on interest rates.
"The fact that we haven’t been able to hold on to the gains that we’ve seen in the first part of the week suggests that I think investors remain very unsure,” said Michael Hewson, chief market analyst at CMC Markets UK.
He said it would be difficult to get a clear idea of the direction stocks would take ahead of the Federal Reserve's meeting.
British grocers were under pressure, with WM Morrison (>> WM Morrison Supermarkets PLC) down 2.8 percent following a target price cut by UBS on the back of Thursday's slump in profits.
Analysts at Barclays said in a note that the limited growth opportunities in the supermarket sector will be hard-fought, and that Morrison "must now generate real volume growth rather than relying on adding or maturing space".
Fellow grocers Sainsbury (>> J Sainsbury plc) and Tesco (>> Tesco PLC) were down 1.9 percent and 2.1 percent.
Miners led the gainers, with Rio Tinto (>> Rio Tinto plc) rising 1.5 percent on a broker upgrade from UBS to "buy".
Glencore (>> Glencore PLC) was up 1.9 percent as spot iron ore prices posted a weekly gain of nearly 5 percent to their highest level since July.
Anglo American (>> Anglo American plc), up 0.9 percent, is likely to be the next mining firm to follow Glencore's example in cutting its dividend to help contain debt levels and preserve cash amid a global commodity market slump, analysts and bankers said.
Glencore, weighed down by net debt of $30 billion and hurt by declines in the prices of its main copper and coal products to six-year lows, this week suspended dividends and said it would sell assets and raise $2.5 billion in a share sale.
In all, the FTSE 350 mining sector index <.FTNMX1770> was set to close 5.7 percent higher for the week. The index reached six-year lows three weeks ago.
(Reporting by Kit Rees; Editing by Andrew Roche)
By Kit Rees
