It has been more than a decade since the last bottle of beer was shipped out of the Stag Brewery in south-west London. But to this day, an eerie silence reigns over the 22-acre site.
Despite winning planning permission in May 2025 for a £1.3bn neighbourhood – including 1,000 new homes, shops and offices – City Developments Limited, its Singaporean owner, mothballed the project this summer amid rapidly rising costs and tepid buyer demand.
After an arduous 10-year battle to secure approval for the plans, during which it was forced to revise proposals several times because of backlash concerning the number of affordable homes and the introduction of new building safety rules, it is understood to be holding on to the site until market conditions improve.
The abandoned brewery has become a grim reminder of London's struggle to build new homes.
Last year, housebuilding in London fell to record lows after work began on just over 5,500 homes, according to analysis from consultants Molior – an 84pc drop compared to 2015. Meanwhile, fewer than 3,000 new-builds were sold in the capital between April and June this year, with just 589 going to UK individuals.
Developers warn that, in the face of tumbling demand from buyers, they can no longer make the sums work as they grapple with soaring costs, reams of red tape and stringent affordable-housing targets.
It threatens a crisis of sky-rocketing rent and a growing exodus of young workers who can neither afford to spend the equivalent of 11 times the average salary needed to buy a home nor continue paying to live under a landlord's roof.
The chief executive at one of the UK's largest housebuilders warns one of the most serious consequences will be the hollowing out of the "economic engine of the country".
"There's not going to be enough housing, which starts a cycle of real concern: rents continue to escalate, there's more pressure on social housing, birth rates fall and people are pushed out of the most productive places," they say.
"All those social consequences aren't going to happen tomorrow, but will be felt in 15, 20 years' time."
Fateful reforms
While it may not have been fully appreciated at the time, 2014 was a good year for London's property market.
Falling unemployment was combined with cheap borrowing thanks to rock-bottom interest rates. Help to Buy , the Government's equity loan scheme, was in full swing, fuelling demand among first-time buyers. And a healthy pool of overseas investors was queuing up to buy property in what was then still an attractive European capital.
"London had a boom in demand for homes to rent and buy between 2009 and 2014," says Richard Donnell, of property portal Zoopla.
"House prices in London were rising 20pc year on year – well ahead of the national average – because demand and confidence were boosting prices."
The first signs of trouble began to emerge the following year, when George Osborne, then chancellor, embarked on his fateful war on landlords.
In quick succession, he curbed mortgage interest relief and imposed a 3pc stamp duty surcharge on buy-to-let properties. A decision two years earlier to close a capital gains tax loophole for overseas investors also kicked in.
Combined with the Brexit vote in the summer of 2016 that committed Britain to leaving the single market, the impact of these policies on property investment was devastating.
Having reached a peak of around 8pc in 2009, international buyers as a proportion of househunters in prime central London has plummeted, reaching lows of 2.9pc last year, according to estate agency Hamptons.
Meanwhile, the number of homes sold off-plan to investors – which provides developers with an important source of funding long before a scheme is completed - also plunged.
Hamptons analysis shows that while 73pc of new homes in London were sold before completion a decade ago, today it has fallen to just over 60pc.
David Fell, the lead analyst at the estate agency, says developers have struggled to replace the drop-off in investor interest, particularly since the close of Help to Buy in 2023.
The equity loan scheme, which offered buyers five-year interest-free loans for up to 40pc of the value of new-builds, helped 44,000 buyers in London during its 10-year lifetime.
"While first-time buyers have stepped in to fill some of the gap, they are generally less willing or able to commit to purchasing a property a year or two before it's built," he says.
But Fell adds that as borrowing costs have risen, early sales have only become more important – especially for generating capital for high-rise blocks, where nobody can move in until the building is complete.
"Development finance is substantially more expensive than it was a decade ago and builders increasingly need to secure sales quickly to turn a profit," he says.
At the same time, the costs and regulatory burden facing developers have ballooned, driving the feasibility of many projects into the ground.
The Home Builders Federation (HBF) estimates that an average of £76,000 has been added to the cost of building a home since 2020, fuelled by a combination of inflation, taxes and red tape.
Steve Turner, at the HBF, says that while inflation has hammered the global construction industry, UK government policy has added to the "burden on development".
Among the most costly are the measures included in the post-Grenfell Building Safety Act, which have added layers of complexity and cost to building high-rise blocks, such as the obligation to install second staircases. Developments in London, which, because of a shortage of space, rely heavily on the ability to build upwards, have been acutely affected.
"We've got to the point where so many policy costs have been layered on that it's simply not viable for developers any more," Turner says. "By the time you've paid for the land and paid to build the house, you can't sell it for more than you've outlaid.
"So, clearly, you're not going to start a site if you're losing money."
Affordable housing requirements in the capital haven't helped. Until recently, developers were required to make at least 35pc of homes in a new project affordable to qualify for a fast-track planning process.
It was only late last year, as the collapse in London housebuilding became too stark to ignore, that Sadiq Khan, the Mayor, agreed to reduce the quota to 20pc.
Yet even so, Turner is sceptical that policymakers have fully grasped the consequences of expecting developers to deliver cut-price homes at a time when profits are wafer-thin.
"If you push too high a percentage of affordable housing on a site, you're going to get a high percentage of nothing," he says.
The chief at the major housebuilder agrees that while regulation is important, the bar has become "too high to pass". "We have gone past the tipping point of costs and policy ambitions," they say.
But Angela Rayner, the Housing Secretary, has clung steadfastly to Labour's ambitious goal of building 1.5 million homes by 2029, declaring as recently as last week that she would not "give it up".
No new homes
All this has been bad news for housebuilding in London.
As it stands, work has halted at one in five construction projects across the city, with the gates padlocked on 56 developments, according to Molior.
Of those that are ongoing, 70pc are set to complete in 2026 and 2027, leaving little in the pipeline over the longer term.
Once those developments wrap up, there are fears that frustrated housebuilders will have already turned their attention away from London's property market for good.
Last week, Kier Group, a FTSE 250 developer, said it planned to "put our effort into infrastructure and construction, given the volatility of the property market". This was followed by Barratt Redrow's announcement that it had cut its housebuilding forecasts for 2027.
"They will move into commercial building," says Maxwell Marlow, at the Adam Smith Institute, a think tank. "They're pivoting into data centres, factories, shops.
"The housing market at the moment is moribund and commercial builders don't have to deal with affordable and social housing, or the turmoil from Budgets. They're not as exposed."
The economics of housebuilding has pushed the developers who have stayed the course towards expensive apartments with luxury amenities such as 24/7 concierges, gyms, and spas. The average service charge for new developments has risen by as much as 89pc in the past five years, according to estate agent JLL.
Under pressure to reverse the slump in demand for new properties, on Sunday, Andy Burnham, the Prime Minister, revealed the introduction of a new Help to Buy scheme.
The initiative, branded Your First Home , offers first-time buyers with a 2.5pc deposit a 20pc equity loan to purchase a new-build property. While details are still scant, it is expected to be more limited in scope than the Tories' Help to Buy scheme, which dished out some £24bn in loans to more than 375,000 buyers.
Chris Lee, one of the architects of the Government's original Help to Buy scheme, says the move will be welcomed by developers after Labour's focus on affordable housing appeared to be stalling much-needed intervention.
However, he warns the introduction of property and income caps, as with the previous Help to Buy scheme, "will likely limit its impact and effectiveness".
"For those trapped in the rental sector, even saving for a 2.5pc deposit, plus all associated purchase costs, is a tough ask," Lee says.
"There is a perfect storm brewing across the housing industry in London and there's a need for some government intervention again . But the existing Government has been more concerned about social and affordable housing and it hasn't been supporting the missing middle to get on to the property ladder."
Londoners pay the price
Indeed, the cost of renting in the capital is proving a major stumbling block for would-be homeowners.
Average rent for a two-bedroom flat has hit record highs of almost £2,500, London Assembly figures show, having risen 3pc in the last year alone.
On current trajectories, they are expected to soar by nearly a fifth by 2029, JLL forecasts.
Many among the city's younger population are responding with their feet. In 2025, London's population fell for the first time in nearly 40 years, excluding the pandemic, with 25 to 29-year-olds the largest age demographic to flee.
The Centre for London, a think tank, has warned that as young people quit the city rather than contend with sky-high rents, it risks leaving the capital bereft of the workers it needs while, at the same time, destroying the "community glue" that families bring.
Evidence of this is most stark in the decline of inner London schools: between January 2020 and 2026, state-school pupil numbers fell in all bar one of London's boroughs, Department for Education figures show.
While the industry awaits more information about its latest equity loan scheme, Lee has also been in conversations with Lord Khan's Greater London Authority about the introduction of a rent-to-buy scheme, whereby aspiring buyers pay developers rent on a new-build home at the equivalent of a 95pc mortgage rate.
A proportion of monthly payments would be ringfenced for a future deposit, with the price of the property fixed at its value when it was first rented.
Lee hopes it will provide an alternative to the Government's shared ownership scheme , which he believes is "restrictive". "Nobody wants to own part of a property and you're being stung on market value whenever you want to buy a larger portion of the home," he says.
Another proposed area of reform that unites everyone from economists and politicians to estate agents and developers is stamp duty.
While the tax brings in billions for the Treasury each year, it acts as "a handbrake on the market" by adding to the cost of buying or moving home, says Toby Leek, the former president of industry body Propertymark.
"Stamp duty is holding people back," he says. "We saw when stamp duty holidays were around, activity in the market kicked in. If they review the tax and it gets the market going, it could really boost the economy."
The Ministry of Housing says it is "working closely with the industry to remove barriers to building the homes Londoners need" as well as "boosting demand to get more people in London on the housing ladder".
But as developers turn their backs on London and invest in projects away from the residential market entirely, it risks being too little, too late.
With nobody around to build new homes and rental reforms encouraging even more landlords to exit the market , Marlow warns that the capital risks becoming a ghost town as Londoners flee to the suburbs.
"Why would you want to buy in this market? I don't see why you'd want to disburse your hard-earned money [on property in London], especially with the mansion tax and stamp duty not going anywhere.
"We've built this incredible city over 1,000 years and recent economic policies have scuppered it."
