John Lewis abandoning its build-to-rent plans is an omen for the future of London housebuilding

If the vision of happy John Lewis renters living in John Lewis flats with John Lewis furniture and Waitrose deliveries always seemed a little too good to be true, it also looked like welcome evidence of badly needed diversification in housing delivery and management. 

However, six years on, what does John Lewis’ decision to pull the plug say about those hopes for the future of housebuilding? 

If the company feels it has to scrap projects on land that it already owns, what does that say about the viability of the vast majority of sites where the developer has to buy the land as well as pay for construction?

And if housing developments on sites with good transport connections in London and the South East don’t work, how will we ever solve the housing shortage? 

Similar problems have already been seen across housing development for sale and for rent, especially in London, where those rising costs have been compounded by delays at the Building Safety Regulator, with developers pleading viability to cut their affordable housing contributions. 

Planning delays, disputes about affordable housing provision and maybe City fears about the Renters’ Rights Act also seem to have played a part in this decision. 

The collapse in housing starts in London may not be quite as apocalyptic as it seems (the more alarmist claims are based on incomplete statistics) but it is still bad enough to have prompted the government to consult on measures to stimulate development, including an “emergency” reduction in the affordable housing target. 

A consultation followed on temporary relief from the Community Infrastructure Levy and changes to the mayor of London’s planning powers. 

But even that does not go far enough for the British Property Federation (BPF), which represents build-to-rent developers and wants bigger and longer reliefs. 

The wariness of the sector as a whole is revealed in the latest BPF build-to-rent survey by Savills. 

Although the number of completed units rose 13% to 146,700 in the past year, starts in London were down 80% in 2025 and starts in the regions fell 37%. 

It’s not hard to see the crunch coming for Steve Reed’s “build, baby, build” approach or the demands coming for further reductions in regulation and affordable housing.

However, a report from Shelter published in February challenges those assumptions, contrasting what it calls a “trickle-down” approach that prioritises private supply at the expense of social housing with a “build-up” approach that puts housing need first.

“If you can’t make the long-term investment case for development of a long-term asset where the land is free and rents will rise in line with earnings, perhaps you need to look at your underlying assumptions”

It cites evidence that developers in London are overpaying for land and actively exploiting viability loopholes to cut the amount of affordable housing delivered via Section 106 agreements. 

This also directly contradicts claims that housing delivery in London is inherently unviable and that what’s needed is further deregulation. 

The report calls instead for clear and consistently enforced social rent requirements on large sites (a minimum of 20%) and the closing of viability loopholes, plus a more interventionist approach from the government, including the compulsory purchase of stalled sites and the removal of hope value. 

Back with John Lewis, maybe this decision also has something more fundamental to say about housebuilding in the capital, where developers seem unable to deliver homes that are affordable even on London earnings. 

If you can’t make the long-term investment case for development of a long-term asset where the land is free and rents will rise in line with earnings, perhaps you need to look at your underlying assumptions. 

Otherwise, that tired old story about house prices always going up near Waitrose stores will come true in a new way – because there won’t be any new homes built on top of them. 

Jules Birch, columnist, Inside Housing