One of Britain's largest property firms has paused construction at a £3.6bn development in London as it struggles to find buyers for its apartments.
British Land , listed on the FTSE 100, will not go ahead with the second phase of construction in Canada Water , south-east London, as the company grapples with rising costs and sluggish sales.
The property group is understood to be waiting for a clear improvement in market conditions before resuming work on the project's mix of homes, offices and retail spaces.
The decision is another blow to the capital's housebuilding industry, amid a steep decline in construction and claims that the market is "fundamentally broken".
The first phase of British Land's 53-acre development at Canada Water includes 245,000 sq ft of offices, along with 186 new homes at a project called The Founding. Nearly 80 affordable homes are also included in the development.
Approval has been granted for up to 4,184 new homes on the site, but in its annual report released in May this year, British Land said it had sold just 57 apartments.
It also admitted that challenging market conditions, difficulties with leases and sales, as well as changes to the development had caused the project's valuation to fall by 6.9pc in the last financial year.
British Land jointly funds the development alongside pension fund AustralianSuper. Both companies have been contacted for comment.
The decision brings one of London's largest regeneration projects to a halt, at a time when London is on course to build just 20pc of the Government's annual homes target of 88,000, according to figures from Molior.
In recent months, a succession of property developers has warned that London is becoming increasingly unviable for new house-building projects.
Landsec shelved a £1.5bn plan this week to rebuild a shopping centre and create 1,700 new homes in Lewisham, south-east London, after the borough's Green-led council demanded more affordable housing.
Jennie Daly, the boss of housebuilder Taylor Wimpey , also said this month that building in the capital was "fundamentally broken", and that the incentive to take on risky projects had "evaporated".
Berkeley, another major housebuilder, recently said it was grappling with " extreme uncertainty " after authorities delayed or blocked plans for thousands of new London homes across different projects.
Buyers are struggling with mortgage costs which have increased rapidly since the start of the Iran war, while construction companies are feeling the pinch from rising material costs.
It comes after home completions across England dropped to their lowest level since 2016.
Figures from the Office for National Statistics show that 142,050 new homes were completed in England in 2025, a nine-year low.
The slowdown in housebuilding casts further doubt on Labour's 2024 manifesto pledge to build 1.5 million new homes by the end of the decade.
