Undeveloped land in Clapton, London E5. Photograph: Dave Hill

Many solutions are proposed for tackling the shortage of houses and flats in Greater London: allowing greater scope for boroughs to build council housing, more money from central government, founding further New Towns and tolerating fewer empty properties are the more widely-advertised. But if one big wish could be fulfilled tomorrow many would opt for strong measures against landbanking. What is it, what’s wrong with, and what can be done about it?

Put simply, land banking is the practice of owners of land that could have homes built on it sitting back and watching the value of the land grow until such time as it can be built on more profitably, sold on at an inflated price to someone else or just sat on as an asset interminably. By exploiting the under supply of homes and rocketing prices of land in London in this way, such land owners are making fortunes out of a crisis they could help solve.

Almost everyone’s against land banking it seems, including politicians from every party represented at City Hall. Boris Johnson himself has labelled it “pernicious” and aligned himself with none other than Ed Miliband by declaring himself ready to act against it. There is, though, a spread of views about what could be done, what difference it would make and what exactly qualifies as landbanking in the first place.

Greater London Authority figures show that planning permissions have been granted for around 210,000 homes that have yet to be completed, and figures highlighted last summer defined 180,000 of these as “stalled.” If all 210,000 dwellings were built it would make a huge contribution to meeting an overall need of between 49,000 and 80,000 a year until 2021, depending on whose calculation you prefer. But how many housing developments are stalled because of those who secured planning permission in the first place?

Much landbanking polemic is aimed at property developers, but a report for the GLA on barriers to residential development in London, conducted by housing consultants Molior and published in December 2012, said that a very striking 45% of homes for which permission had been gained would not be built because the companies that had secured them were not actually in the building business. Owner-occupiers, historic land owners, government, investment funds and “‘developers’ who do not build,” were listed. By contrast, developers genuinely in the business of building were found to be wanting to get on with it. “When accusations of landbanking are directed at builders, those accusations are misplaced,” concluded the report.

Non-Conservative politicians aren’t so confident even of the authentic developers. Darren Johnson for the Greens recognises the GLA/Molior report distinction between builders and investors and points his finger mostly at the latter, but Labour’s Nicky Gavron, who chairs the London Assembly’s planning committee, argues that it is in the interest of the house-building sector too to limit supply, pushing and prices and profits as a result. She also cites banks for a reluctance to lend the necessary money.

Stephen Knight, housing spokesperson for the Lib Dems, complains that “under the current system developers can get away with digging a hole in the ground weeks before their permission is due to expire in order to keep their planning consent alive, with no intention of actually carrying out full development for years to come.” As for the Tories, they, along with their mayor, have addressed the problem of stalling by calling for relaxations of the requirements on developers to provide “affordable” housing, making the case that releasing them from this “planning gain” burden under Section 106 agreements can re-start bogged down schemes by making them financially viable again.

But all now favour the introduction of some kind of so-called “use it or lose it” powers to enable boroughs or the mayor to put pressure on site owners to implement planning permissions more speedily. The idea also enjoys the support of a think tanks ranging from Localis to the Institute for Public Policy Research, and from London Councils, which represents the capital’s 33 local authorities. The ultimate sanction would be a stronger and more streamlined compulsory purchase order system, enabling local authorities to take ownership of land by force of law (something the Local Government Association has recently asked for in relation to empty homes).

Some insist that the land banking problem is overstated but the GLA/Molior report argued that if work on every site for which planning permission had been obtained at that time began immediately “somewhere between 50,000 and 70,000” homes would be completed for each of the ensuing three years. If “use it or lose it” could help bring about even the lower of those two figures in London it would be a big boost.

Meanwhile calls from across the political spectrum and elsewhere continue for the introduction of another measure to lessen landbanking – a land value tax, something both Darren Johnson and Stephen Knight strongly endorse. Conservatives might reflect that Winston Churchill was pretty keen on the idea too. Will Boris Johnson follow suit?