L&Q blamed a serious downturn in demand which had impacted market sale houses needed to fund the development of affordable housing.

It also warned that it was now experiencing rising costs from more stringent fire safety requirements and new quality standards.

In an email to L&Q staff, chief executive David Montague, wrote: “The whole housing sector is operating in one of the most challenging environments in recent history.

“Although the outcome of Brexit is still unknown, the uncertainty it has created has resulted in a serious downturn in the housing market.

“On top of this, we face ever-growing costs to meet new government guidelines on fire safety and to deliver on our quality promise. So far this year, L&Q has committed a record £202 million to this work – and we need to be prepared to invest more, if necessary.”

He added: “We have already slowed our development programme and will now pause taking on new projects for the moment.”

Montague said L&Q would not be downing tools altogether and remained committed to tackling the housing crisis.

It was still on track to hand over a record number of new homes this year and next with the development pipeline now  at 50,400 homes, and 16,000 new homes already on site.

As part of the business review, L&Q will also examine the way it delivers repairs to prioritise reactive maintenance to improve its service.

L&Q has also imposed a new recruitment freeze until the end of its financial year but it will not apply to its internal construction teams, including direct maintenance operatives and site managers.

Montague said: “We are in active discussions with our partners and the government to ensure that we can overcome market obstacles and do everything we can to keep building quality new homes.”