The future of the Canada Water Masterplan in Rotherhithe has been thrown into doubt after reports that work on its second phase has been paused. The development was billed as London’s first new town centre in 50 years, but concerns are now growing over whether the next stage will go ahead as planned.
The multi-billion-pound scheme by British Land spans a 53-acre site in south east London and is being delivered in phases, with planning permission needed for each stage. According to MyLondon, work on phase two of the 3,000-home development has been paused amid rising construction costs and slow demand for homes already completed in phase one.
British Land declined to comment. AustralianSuper, which is partnering with British Land on the scheme, did not respond before publication, MyLondon reported.
What has been approved so far
Southwark Council granted planning consent for the Canada Water Masterplan in May 2020. That approval covered 2,185 homes, with 35 per cent set to be affordable, alongside 4.7 million square feet of retail, office and leisure space.
In January 2025, British Land submitted a Section 73 application to amend the original consent, citing changes to building regulations and what it described as sector-wide cost and viability challenges. City Hall approved the revised plans in March this year.
That change reduced affordable housing from the original 35 per cent to 9 per cent. The second phase had been due to start next year and included 150 social rent homes, which British Land said equated to 20 per cent policy-compliant affordable housing in that phase.
Pressure grows on developer to explain next steps
Cllr Victor Chamberlain, Southwark Council’s Executive Member for Neighbourhoods, Strategic Planning and Wellbeing, said: “We recognise the difficult market conditions facing developers across London. Rising construction costs and weak demand are making it increasingly difficult to deliver new homes, with consequences for jobs, businesses and communities.”
He added: “But the need for affordable homes has never been greater. Residents need confidence that the homes, workspace and community facilities promised at Canada Water will be delivered.”
Rotherhithe ward councillor Colin Boyle said he was “extremely disappointed” and has written to British Land asking it to meet the community and explain its decision and what it plans to do next. MyLondon also reported criticism from campaigners and legal representatives, who argued that cutting affordable housing has not led to faster delivery.
