There are around 400,000 houses waiting to be built in England according to new research.
The Local Government Association has found developers are now putting in fewer planning applications and taking longer to complete work on site and that almost 400,000 homes in England have been given planning permission but have yet to be built.
Councils are concerned that the fall in planning applications they are receiving may threaten the prospect of a long-term housebuilding recovery.
The LGA said the figures show the need for government to remove restrictions on council investment in housing.
Preliminary findings, show that:
Local authorities are calling for significant investment to tackle the new homes backlog and get more homes built.
Thousands of shovel-ready sites could be kick-started into action if a Treasury imposed cap on the amount councils can invest in new housing was lifted.
Recent research showed that councils could build up to 60,000 additional new homes over the next five years if they were allowed to invest in housing against normal borrowing guidelines.
This would create jobs, boost Gross Domestic Product by 0.6 per cent and reduce the housing benefit bill.
Councilllor Mike Jones, Chairman of the LGA’s Environment and Housing Board, said: “The bumper backlog of unbuilt homes and drop in the number of planning applications submitted to councils last year is a worrying sign that the housing market is not yet on the road to long-term recovery.
“While there has been progress made, this risks being undermined if we do not find a way to ensure developers keep up with demand.”
“Councils are approving nine in every 10 planning applications we receive and we know that there has been an increase in the numbers of first-time buyers getting mortgages.
“The challenge now lies in actually getting houses built. Government schemes to help buyers access finance risk creating a bubble if there isn’t an increase house building to match it