John Lewis exits Build-to-Rent housing projects

John Lewis is shutting down its housebuilding arm and abandoning plans to deliver 1,000 rental homes across three sites.

The firm is blaming higher borrowing and construction costs since the venture was launched in 2020.

The employee-owned retailer said the decision also covers an exit from property management when four residential building contracts expire.

Resources will instead be redirected towards its core retail brands, John Lewis and Waitrose, as the partnership looks to simplify operations and reinforce its balance sheet.

BtR scheme ends

A spokesperson for the John Lewis Partnership said: “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.”

Its move ends a £500m build-to-rent initiative spanning Bromley, Reading and West Ealing, where schemes had been designed to deliver large-scale rental housing.

John Lewis homes plans

The withdrawal follows several years of repositioning inside the partnership’s retail estate, including job reductions and store closures.

Five years ago, the partnership outlined proposals to build as many as 10,000 rental homes, targeting 40% of profits from non-retail activity by 2030.

Development pipelines included construction above Waitrose supermarkets and regeneration of underused land.

Planning consent had been secured in principle across the three current schemes.

However, the Bromley proposals ran into difficulty after affordable housing numbers fell short of early expectations.

Also, the Reading project drew objections from residents concerned about pressure on local infrastructure.