Analysts believe Persimmon may take the action once it has finalised its £537m takeover of Beazer. One said that, although timber frame and modular housing had been a key investment for Beazer, Persimmon had no track record in prefabricated housing.
He said: "Persimmon may well choose to turn Beazer into an image of its own operation." A Persimmon spokesperson said it would be inappropriate to comment on the future of the business until the deal with Beazer is approved. She said Persimmon had told its shareholders that the timber-frame kits would continue to be produced in the current volumes.
The factory, which is part of Beazer's Torwood Homes subsidiary, became fully operational in January. It was expected to produce up to 2000 timber-frame houses a year.
Torwood recently signed a contract to supply social housing provider Amphion Homes with 1000 timber-frame house kits. The houses, to be built in south-east England, were intended to demonstrate that the Egan agenda could be applied to housebuilding.
One City source said Persimmon had already approached the client, social housing consortium Amphion, over the future of the factory.
Amphion said it had received verbal assurances from Beazer that the future of its contract with Torwood was assured.
Torwood has a second factory in West Lothian. Sources believe that Persimmon will retain this as demand for timber frames is greater in Scotland.
A Beazer spokesperson said the firm could not make any comment as the future of the factories was not its decision.
The £1.6bn merger between Beazer and Persimmon is to be decided on by shareholders on Monday. It must then gain regulatory approval from the Office of Fair Trading, which has put its decision back until 16 March.
Prefabricated housing was one of the drivers of the doomed Domus venture between Beazer and Bryant that was scuppered by the bids from Persimmon and Taylor Woodrow.
Beazer chief executive John Low had intended to concentrate most of Beazer's production on prefabricated techniques.