John Lewis Partnership has abandoned its £500 million build-to-rent venture, citing construction inflation and higher borrowing costs. The decision to close its rental property division delivers a blow to the institutional rental sector just as an industry body calls on the Chancellor to reinstate tax relief ahead of next week’s Spring Statement.
Five-year BTR ambition collapses
The retailer announced in 2022 a joint venture with global investment company Abrdn to deliver around 1,000 new build-to-rent homes across three locations. As recently as October 2025, the partnership received planning approval for a £70 million regeneration scheme in Reading.
In a statement, John Lewis 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.” The decision marks a retreat from the diversification strategy established under former leadership. The partnership will now focus on its core retail brands, John Lewis and Waitrose, to strengthen its balance sheet.
For landlords watching institutional competition in the rental market, the withdrawal suggests even well-capitalised operators are finding current market conditions challenging. Build-to-rent investment has previously grown rapidly – research showed the sector attracted record levels of investment in early 2025.
BPF urges Chancellor to restore stamp duty relief
The British Property Federation has responded by calling on Chancellor Rachel Reeves to reinstate Multiple Dwellings Relief in next week’s Spring Statement. The bulk purchase tax relief, which formed part of the Stamp Duty Land Tax system in England and Northern Ireland, was abolished in 2024.
The BPF claims the abolition of MDR directly stalled or hampered the delivery of up to 25,000 build-to-rent homes by making them financially unviable. The industry body argues the cost to the Treasury of these unbuilt homes – from a combination of lost stamp duty receipts and economic activity associated with construction – outweighs the tax revenue saved by scrapping the relief.
For private landlords considering whether to expand or exit the market, institutional setbacks may signal a degree of breathing space. However, the underlying pressures – high construction costs, expensive borrowing and regulatory uncertainty – affect landlords of all sizes. The BPF has previously called for 30,000 BTR homes annually to address housing supply shortages.
The government’s Spring Statement is expected on 26 March, though there has been no indication that stamp duty changes are under consideration.
Editor’s view
John Lewis’s retreat from build-to-rent shows how quickly market conditions can turn. For private landlords, this is a reminder that even deep-pocketed institutions are finding rental investment challenging – validating concerns about costs, taxation and regulation that individual landlords have raised for years.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 26 February 2026
Sources: John Lewis Partnership, British Property Federation
Related reading: Build-to-rent completions hit record high as investor confidence grows
