The retailer had entered the sector with ambitious plans, unveiling a £500?million long-term partnership in 2022 to deliver around 1,000 rental homes across three sites.
Momentum appeared to continue as recently as last October, when it secured approval for a £70?million redevelopment of a brownfield plot in Reading.
That entire strategy has now been abandoned, leaving major questions over the future of those schemes and confidence in the wider sector.
John Lewis’ retreat is being driven by a shift in strategy, according to overnight reporting from the BBC.
The partnership is refocusing on its core retail brands — John Lewis and Waitrose — as part of an effort to streamline the business and shore up its finances. The company has pointed to sharply rising construction costs as the reason it is pulling out of its rental-homes programme.
A statement is made and says: “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.”
The main Build-to-Rent lobby group says the sector has hit a standstill, and it is now pushing for a major tax change in next week’s Budget to revive stalled investment.
The British Property Federation (BPF) is urging Chancellor Rachel Reeves to restore Multiple Dwellings Relief (MDR), a Stamp Duty Land Tax incentive that was abolished in 2024. MDR previously reduced the tax burden on bulk purchases of homes, a mechanism widely used in Build-to-Rent financing.
According to the BPF, removing MDR has directly slowed or derailed the delivery of as many as 25,000 Build-to-Rent homes by making schemes financially unworkable. The organisation argues that reinstating the relief is essential to get large-scale rental developments moving again.
The BPF argues that scrapping the relief has ultimately cost the Treasury money, claiming that the loss of Stamp Duty receipts and the wider economic activity tied to building those homes outweighs any savings made by abolishing it.
The federation estimates that a redesigned, Build-to-Rent-specific version of MDR would carry a fiscal cost of around £155?million. It says that if such a measure helped unlock 25,000 delayed homes, the resulting construction work and associated spending could generate roughly £650?million in additional tax revenue.
The slowdown is already visible on the ground. In 2025, only 613 new Build-to-Rent homes began construction in London — an 80% fall compared with the previous year.
Construction activity outside the capital has also slumped, with starts falling 37% from 12,781 to 8,063, according to figures from the BPF and Savills.
The BPF chief executive Melanie Leech says: “The tax system is undermining the viability of much needed new homes in London and across the country.
“We urge the Chancellor to act now rather than delay to the Autumn, when the housing delivery numbers will be as stark for 2026 as they have been for 2025.”