John Lewis has dropped its plans to build 10,000 rental homes in the UK, citing “a fundamental shift in the economic conditions” since it launched the business arm in 2020.
In a statement the company said: “The John Lewis Partnership has today announced its decision to withdraw from its ‘Build to Rent’ property business.
“Our rental property ambition was based on a very different financial environment: one with more stable investment returns, lower borrowing costs and more affordable costs to build homes. Unfortunately, the current climate – higher interest rates, inflationary pressures and a more cautious property market – has meant the model no longer meets the Partnership’s investment criteria."
The group said that since it embarked on the plans in 2020, it had made significant progress with its core retail strategy which had seen it "invest heavily in our customer offer for our unique brands John Lewis and Waitrose, simplifying our business and strengthening our balance sheet". It added that it remained a committed land owner in its communities and continues to invest significantly in its property assets and retail offer.
“We’re proud of what we’ve achieved in terms of progress with three planning applications and managing third-party BTR homes for residents to a high standard. We will fulfill our existing management contracts at four BTR sites as part of a responsible transition out of the business.”
The team secured planning consents for approximately 1,000 homes. At West Ealing, a public inquiry decision recognised the need for car parking to maintain supermarket viability, establishing a precedent with wider relevance for grocers pursuing mixed-use intensification. At Bromley, the team secured the borough’s first build to rent consent, alongside the tallest building in the borough. A scheme in Reading, on a disused former industrial site, received unanimous consent in October 2025.
The team also took on management of four Aberdeen Investments-owned buildings in Leeds, Leicester, Birmingham and Stratford, previously managed by JLL, in a £500 million joint venture. The group said it had driven a 15% uplift in net operating income across the portfolio.
Brendan Geraghty, CEO, Association for Rental Living, said in a statement: "This is deeply disappointing news and a real loss for consumers. JLP brought something genuinely different to rental living – a trusted consumer brand, a service-first culture and a long-term commitment to quality that institutional investors and residents alike responded to. The operational improvements they delivered across their managed portfolio speak for themselves. The fact they were able to build a fully-operational business in under 18 months speaks volumes about the leadership of [director of build to rent] Katherine Russell and about the determination of the Partnership.
"When a brand as well-known and well-resourced as John Lewis concludes that the economics no longer work, ministers need to sit up and think very carefully about how they respond.
"The ARL stands ready to work with government to get this right. But the window is narrowing to meet Government targets this parliament."
Iain Murray, head of operational living at Bidwells, a property consultancy, said: "This was a hugely ambitious project in 2020, but today’s economic and legislative landscape has rendered it unviable. The mixture of regulatory and legislative barriers that currently exist find even the most compelling and necessary developments struggling to find investment. Government must shoulder much of the blame for today's news.
"That said, there remains a significant requirement to deliver homes, and the intent of utilising the space above town centre supermarkets is not flawed. Realising this potential will require targeted planning carve-outs and policy interventions that sit squarely within the Housing Minister’s remit."
Debra Yudolph, founder and chief executive at SAY Property Consultancy, said: “There must be an opportunity to find solutions, particularly around retail sites that are well located in town centres. But this has to take account of the financial realities of retail. It will require ministers to be pragmatic and flexible, not just tinker around the edges as we have seen in recent years.”