Around 40 firefighters in six fire engines were scrambled to the semi-detached house which is being renovated in leafy Gilston Road, Chelsea.
One man was found at the bottom of the pit with his leg trapped beneath a piece of equipment.
A colleague said he had “god on his side” as he emerged uninjured.
Firefighters stabilised the hole and winched him to safety. He was treated at the scene by paramedics, who were also called to the scene.
Another man was rescued via a ladder, while 12 others were evacuated from the site as a precaution.
Firefighters were called to the scene shortly after 1.15pm on Monday and remained there more than four hours, until around 5.30pm.
A worker on the site said: “ The ground conditions and the ballast used has made it very difficult .They got him out but he looked in deep shock.. I think god was on his side as he had a lucky escape. There were loads of firefighters and the site was closed while they worked.”
Station Commander Stephen Irvine, who was at the scene, said: “This was a complex incident and crews worked incredibly hard using specialist equipment to safely rescue the man. Thankfully, he was okay.
“One of the Brigade’s 32-metre turntable ladders was used to lower air bags to stabilise the hole so that crews could gain safe access and then lift the man to safety.
The ambulance service said: “We sent multiple resources to the scene, including an ambulance crew, an incident response officer and members of our hazardous area response team (HART).
“Our first medics arrived in around two minutes. We assessed a patient before discharging him at the scene.”
A statement from construction firm Lansgrove said: “An isolated incident took place on one of our sites yesterday afternoon and the emergency services attended. We are currently investigating what happened and will be undertaking a full review of the circumstances that led to the incident.
“There were no injuries and we expect works to resume shortly.”
A mother of three, who lives on the road, said: “There were firefighters everywhere we naturally thought there was a fire. It was very dramatic.”
A spokesperson for the Health and Safety Executive (HSE) said: “We are aware of an incident and currently making enquiries.”