Developers have failed to build four out of ten homes approved by councils over the past decade, according to the Local Government Association.
Analysis by the LGA showed that 2,564,600 homes have been granted planning permission by councils since 2009/10 while only 1,530,680 have been completed.
It said the backlog of unbuilt homes shows the planning system is not a barrier to housebuilding.
As part of its submission to the Treasury ahead of next month’s Budget, the LGA is calling for the government to reform Right to Buy, by allowing councils to keep all of the receipts of homes sold replace them, and to have the flexibility to set discounts locally.
David Renard, LGA housing spokesman, said: “If we are to solve our housing shortage, councils need to be able to get building again and resume their role as major builders of affordable homes.”