Topping Prime Minister Gordon Brown's agenda, the housing target has been backed by £3 billion of funding, but ministers are urgently looking to find new ways to provide the homes and meet the housing demand.
Furthermore, the committee will look at the options for improving housing quality and design, as well the role the private sector will play.
The committee will hold a public inquiry session in November, and will make its final report and recommendations in early 2008.
Clive Betts, Labour MP for Sheffield Attercliffe and chair of the group, said: 'The government has set out targets for new homes - but the current system will not deliver what's needed. Our inquiry will provide recommendations for ministers, who are right to have started a national debate on housing policy.
'We must now find better ways to build new housing - and the solutions will involve both public- and private-sector players.'