John Lewis began its push into housebuilding as a new way to bring in money but has struggled with what it said was a “fundamental shift in the economic conditions that underpinned the venture when it launched”.
“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,” a spokesperson said.
The retailer said other housebuilders were in a similar position, and added that housing development had “collapsed” in London.
Experts have pinned this on a combination of rising construction costs, lower demand for London flats, more regulation post-Grenfell, difficulty getting planning permission, and higher interest rates making it harder to build using debt and harder for people to buy.
John Lewis has also faced issues within its retail business over the last six years, including job cuts and shop closures amid the rise of online shopping.