London Mayor Boris Johnson was challenged yesterday to "take a stand" over the crippling effects of land prospectors in the capital as the housing shortage crisis deepens.

Labour London Assembly member Tom Copley warned that greedy developers were "deliberately slowing down the availability of new properties" and Mr Johnson should establish a London Housing Corporation (LHC) to build homes directly.

His report Fair Housing proposes that the new organisation would tackle the backlog caused by developers deliberately restricting the supply of homes to keep prices high.

Mr Copley said: "Boris has overseen a collapse in house-building.

"It is time the mayor took a stand and used his considerable financial firepower to directly build the houses Londoners so urgently need."

His proposals were backed up by a survey undertaken for the report that revealed 43 per cent of Londoners spend between 25-50 per cent of their take-home pay on housing, while 23 per cent spend over 50 per cent of their take home pay on housing.

The report also criticised the government's definition of affordable rents, which is currently defined as 80 per cent of the market rate.

It said: "By forcing through reforms to affordable housing that squeezes out social housing ... some households will need incomes in excess of £100,000 a year to afford the rent on a family-size 'affordable' home in parts of inner-London."

The report's recommendations, which were presented to the mayor, include loans for landlords to bring accommodation up to standard, establishing a bad landlords register and a "know your rights" website for tenants, as well lobbying the government for an increase investment in affordable housing.

The report suggested that the new London Housing Corporation would borrow against the GLA's revenue stream to rapidly expand housing supply by directly commissioning new homes, and encourage institutional investment from pension funds.

The LHC would work with councils, housing associations and private developers to build mixed communities, however the report does not specify the percentage of housing stock each one would receive.

Defend Council Housing chairwoman Eileen Short welcomed the proposals on the provison that "landlords were democratically accountable" so that affordable rents could be set.