Shelter has found 2,500 homes in nine cities were lost due to housebuilders exploiting the system.
Many of this was due to developers’ use of viability assessments, which has meant they were able to lower the number of affordable homes being built.
This means local authority targets were being missed.
The research by Shelter shows Manchester, Birmingham and parts of London being greatly affected.
In some places, the margins were being squeezed so much that the number of affordable homes were less than 1% of the homes being built.
Developers do this to maximise the profits on a site.
Shelter said that local authorities had “little choice” but to approve planning applications from developers with fewer affordable homes. “If they refuse permission, the developer can appeal and will probably win,” it said.