Large declines of urban and suburban house sparrow (Passer domesticus) populations have been recorded in many towns and cities across Europe. In London, sparrow numbers fell by 60% between 1994 and 2004. The cause(s) of the decline is still not resolved.
Prominent theories include:
• Reduction in the availability of favoured food, either for adults or chicks or both.
• Increased levels of pollution.
• Loss of suitable nesting sites.
• Increased prevalence of disease.
• Increased levels of predation.
with other suggestions such as:
• Mobile phone mast radiation.
• Fibreglass loft insulation.
To date, no scientific research projects have proven any of the theories - either alone or in combination with others.
Since 2013 there are reports that the rate of decline has stabilised - recent anecdotal evidence suggests that in some areas (of the UK) the numbers may be increasing again.
More details here at the British Trust for Ornithology
Update April 2020. Recent RSPB surveys suggest that sparrow numbers may be on the increase in the UK. See: The Guardian April 2nd, 2020.
Note: In 2000, UK newspaper The Independent offered a prize of £5,000 for a proper scientific explanation of the house sparrow's widespread disappearance - the prize remains unclaimed.