The Office of Fair Trading (OFT) has announced an investigation into land-banking, and why it takes so long to develop plots already earmarked for housing.
The inquiry will scrutinise 'whether land which is suitable for development is being effectively brought through to the planning-approval stage'.
The investigation, understood to be the first of its kind, will also look into whether land with planning permission is being converted into homes. Developers can make millions by cashing in on subsequent increases in land value.
The OFT report will put a number of developers and schemes under the spotlight - not least the Meridian Delta joint venture's scheme to build 10,000 homes on the Greeenwhich Peninsula.
Meridian Delta - also known as Greenwich Peninsula - is a joint venture of Quintain and Lend Lease. In 2003 the developers were sold the land by English Partnerships and given planning permission for the 13 million m2
site, but it has taken four years for the first scheme - only 229 units by Bellway - to get under way.
A spokesman for Greenwich Peninsula denied that it was just sitting on the valuable land, saying: 'It is a big site and is really complex. As soon as we have been able we have got on with the work.'
In addition to investigating land banking, the OFT will try and gauge 'customer satisfaction' by investigating how happy homebuyers are with properties available.
The OFT has been monitoring the housebuilding market for the last three years - following the recommendations of the Barker Review of Housing Supply in 2004 - and has become increasingly concerned that the 'market may not be working well for consumers'.
John Fingleton, the OFT's chief executive, said: 'This is a hugely important market for the economy because of its substantial economic impact and because unresponsive housing supply hinders labour mobility, constrains economic growth, and harms consumers.'
Stephen Proctor, chair of the RIBA housing group, said: 'Anything that gives us a little more knowledge about the quality of housing and homebuyers' satisfaction is a good thing.'
The OFT is expected to announce its findings next summer.by Richard Waite and Max Thompson