Nearly half of new homes (46%) given planning permission in the capital are not being built.
This represents a major increase from 33% in 2016.
The analysis comes from London First, an organisation formed of business leaders in London, and , Grant Thornton, an independent assurance, tax and advisory firm.
Jasmine Whitbread, chief executive of London First, said: “Every year tens of thousands of new homes fall by the wayside, and the ongoing slide in planning permissions will only make things worse.
“London’s housing pipeline appears to be cracked and, unless we get to grips with the housebuilding hold ups, generations of Londoners will be priced out of a place to call home.
“With outer London building just 3,000 homes in 2017, barely a tenth of the new homes brought to the capital, the Mayor must get serious about holding these boroughs to account.
“To tackle London’s housing crisis, boroughs must free up more land, the government must enable more investment and developers must start building the homes we need.”
In 2014, 54,941 homes were given planning permission but three years later, the point at which planning permission typically runs out, only 29,701 were under construction or completed.
The Mayor of London Sadiq Khan’s housing target states that London has to build 66,000 new homes each year to meet its growing need and put right years of underinvestment.
But the capital seems able to only build a fraction of these: completing just 26,458 in 20171.
There is an appetite to build, with a record number of planning applications in 2017: nearly 80,000, a 14% increase on 2016 and more than double the number of applications in 2010.
But the number of homes given planning permission continues to fall, from 54,941 in 2014 to just 48,024 in 2017.
The number of affordable homes has seen a welcome increase with 14,372 given the go ahead in 2017, making up 30% of permissions and almost twice the number seen in 2010.
Looking at completions, 7,510 affordable homes were built in 2017, up from 2,379 in 2010 but still far short of what the capital needs.
London’s outer boroughs continue to lag behind in housebuilding, with just 1,029 new homes built in TfL zone 5 in 2017, compared with 10,106 in zone 2.
Its outer boroughs make up more than half of London’s land but, just 3,278 new homes were built in 2017, compared with 12,943 homes built in central London.
The Mayor has promised to boost building in the outer boroughs with plans to build more than 250,000 new homes in the capital’s 13 outer boroughs, more than double the current rate.
The draft London Plan, published for consultation last year, proposes to help boost the number of homes built near town centres and transport hubs and encourage building on small sites, such as in-fill opportunities, garages and available plots of land.