Just as London bursts at the seams – with almost 300,000 households stuck on council housing waiting lists and rents reaching record highs – the supply of new homes is shrinking rapidly.

In the past six months, some 2,000 new homes were completed in the capital, around five per cent of the target of 38,603. Last year 38,000 new homes were completed, and in 2016/17 the total was a record 43,825. Since then, numbers have been in steady decline.

Meanwhile, since April, work has started on close to 5,000 new homes. Last year’s total was more than 12,000, and in 2016/17 work on more than 67,000 new homes began – again, numbers have been dropping sharply ever since.

In the pipeline, during the first half of 2022/23 some 6,000 new homes have been given planning permission. Last year there were almost 31,000 and in 2018/19 there were almost 83,000.

The proportion of affordable homes earmarked for priced-out first-time buyers and renters has also been dropping, despite GLA and government quotas. In 2005/6 a third of permissions were for affordable homes. So far this financial year the total is 22 per cent.

Experts say housebuilders are holding back because they simply can’t see how to squeeze a profit out of new homes anymore.

“It all comes down to viability,” explained Gaby Foord, associate director of Savills’ residential research team.

“Land values are high, there are competing uses for it including industrial, which has higher yields at the moment, housebuilders have targets for the number of affordable homes they have to include in schemes, and their building costs are increasing, thanks to a combination of supply chain issues during the pandemic, Ukraine, and, to a point, Brexit.

“Most of the demand for new homes is at a price point of around £450 per square foot, and it is hard to see how new homes can be supplied for that.”

Adding to the problem, said Foord, are the seemingly endless changes in policy from central and local government on everything from sustainability to fire safety. “It is very erratic,” she said.

The New Economics Foundation think tank, meanwhile, believes the underlying problem is property speculators buying up tranches of development land to sell at a profit, and driving up prices.

A recent report by the foundation said areas with high land values, led by London, also have the highest house prices, rents and levels of homelessness.

It called on the government to establish a land commission to control land values, and tax the windfall profits earned by landowners.

If a solution is not found Foord fears that all Londoners will suffer. “If you want to be able to retain talent and keep London as a global city you have to provide homes which people can afford,” she said.