London’s house-building woes: the sums don’t work

In south-west London, the old Mortlake Brewery site has been mothballed. By now, if everything had gone to schedule, the sprawling complex on the south bank of the Thames would have been on course to provide over 1,000 homes, many of them affordable, plus shops, a school and leisure and community facilities. Instead, the owners have failed to find a buyer, so it’s being used for film sets and storage. Formerly known as the Stag Brewery, it’s a short walk from Mortlake Station. Indeed, the station is clearly visible from the former brewery entrance. By any criteria, it fulfils the declared aim of Angela Rayner for there to be more house-building on land close to Tube and railway stations. “By unlocking thousands of homes around well-connected transport hubs, we’re helping people live closer to work, school and the services they rely on, while backing local businesses and driving growth in our communities. That’s how we’ll tackle the housing crisis and raise living standards.”Not just Rayner, but Sir Sadiq Khan. Said the Mayor of Rayner’s move: “London needs more affordable homes and building near stations can help us deliver them.” But in a blow to Richmond Council, which has government housing targets to meet and to local people, who, despite having reservations about the height and density of the proposals, were keen to see it redeveloped, the 22-acre facility looks set to remain a rusting, abandoned eyesore. That’s because, despite Rayner’s entreaties and ambitions, it appears prospective buyers cannot make the sums work. It was bought by Singapore-based City Development Limited in 2015 for £158m. A 10-year arduous and expensive planning process ensued, at the end of which, there is nothing. Approval was given, finally, in May 2025 for a £1.3bn, riverside 1,068-home neighbourhood with a school, shops, offices and nine acres of green space. But now, no one wishes to know.Mortlake Brewery site regeneration...Today’s builders must contend with multiple issues, with increased material and funding costs, not to mention a shortage of skilled workers and the post-Brexit difficulty of bringing them in from the EU, extra regulations introduced after the Grenfell disaster, including fire-safe cladding, and a collapsed London apartments market. It has been taken off the market and the owners seem resigned to keeping it until conditions improve. The Mortlake Brewery Community Group, or MBCG, which has campaigned vigorously for a change of use that would be acceptable to locals, said: “This is a huge disappointment for those of us who have campaigned for a sustainable development bringing the heart back to Mortlake. MBCG believes that if the council and developers had been more responsive to plans put forward by the community, we would now be seeing the construction of a thriving mixed development.” That is their take. Having made such a hefty outlay, the developers initially proposed a scheme that would have yielded a profit. Protests saw the plans go back and forth and a marathon row ensued. By the time there was resolution, it was too late. The result is loss: to the neighbourhood; to people desperately short of somewhere to live; to the nearby state-funded Thomson House School which must make do with its existing buildings; to the aesthetics of the riverside (it’s the giant, ugly structure that looms large towards the end of the Oxford-Cambridge Boat Race); to the owner who, while receiving rental income from The Story Works film studios and from the warehousing, cannot have begun to recover what it spent. It’s a picture that is all too familiar to the nation’s housebuilders. A mere 1,220 private housing developments obtained planning approval in England in the first three months of this year. Last year, permission was given for 216,000 residential units — far short of the 300,000 figure the Government requires if its manifesto pledge of 1.5m new homes over the five-year parliamentary term were to be achieved. Nationally, house-building is at a 12-year low. In London, the situation is bleaker still. Builders broke ground on only 6,325 homes in London in the first quarter of 2026, equal to 7 per cent of the Mayor’s yearly 88,000 target. Those where building has begun are not shifting: across the capital, 22,000 properties remain unsold or under construction, according to research from real estate consultants JLL. Against that backdrop, it is hardly surprising that a once shining jewel like the Mortlake Brewery should be consigned to staying unloved and forlorn. Under her changes, Rayner is awarding a “default yes” to housing within walking distance of railway stations. Some green belt land was included. That sounds like a substantial leap and Labour duly made a song and dance about it, but this seeming lifting of restrictions also comes with new minimum density levels, regulations to safeguard pubs and community facilities, and the requirement that at least 40 per cent of large developments meet higher accessibility standards. If it’s in the green belt, there are additional affordable housing and infrastructure rules. But it pays no heed to the harsh business reality currently facing housebuilders. “The problems are now very complex and multi-layered and have increased since Angela Rayner’s first term as housing minister,” says Nick Kilby, an expert in government and planning who runs the Cratus Group communications agency. Read MoreThere is still no sign of promised government financial assistance for the sector There is still no sign of promised government financial assistance for the sector, vital if more affordable homes are to be built. Announced in July last year, the £39bn Social and Affordable Homes Programme has stalled. As well as the regulatory burden, rising costs and shortages they must face, some developers must contend with paying a lot at the top of the market, agreeing to prices that will now struggle to yield a healthy return. It’s not all about developers. The cost-of-living crisis has caused issues. The increase in student fees and loan repayments has hit first-time buyers. They must persuade mortgage lenders they can also meet their repayments, that their jobs are guaranteed — this at a time when AI is wreaking havoc. The “bank of mum and dad” is not what it was either, with parents facing possible increased taxes themselves. That is without mentioning stamp duty. “The Government really needs to sit down, listen and consider suspending tax increases, stamp duty and the rest, if they want to build and sell homes,” said Kilby. “They must unlock and speed up the system, end the delays which cost money and bring forward affordable housing grants”. Rayner and her ministerial colleagues, and Khan, should be asking: why is house-building capacity going down, not up? Yes, she claims to make it easier to build; yes, she has earmarked land by railway stations; yes, she is talking a good game. But it does not amount to anything if there is no money to be made from moving ahead and actually building and trying to sell. Rayner should look at the situation in the round, not indulge in a selective pick and mix and seize upon one aspect. If the minister needs a case study, she could do worse than examine the debacle that is the Mortlake Brewery.