It can take 15 years to complete building on some of the largest sites, Sir Oliver Letwin’s report found.
And builders’ fears of “flooding” the market with identical properties is a large cause for delays.
As a result, developers should be obliged to build a wider range of properties with different designs and tenures on large sites to speed up homebuilding, it was recommended.
New planning rules should be drawn up for sites with more than 1,500 homes.
There should also be a National Expert Committee to advise councils on the different types of properties that should be offered on large sites, which would also handle appeals where there is a dispute between developers and local authorities.
Government incentives for homebuilders to change plans for existing sites would help developers start offering a variety of property types immediately, the review said.
And he conditions could be put on government funding for house developers or purchasers if they do not voluntarily follow the new planning rules after 2021.
Adapting these measures would help the government reach its target of 300,000 new homes a year, the review added.
No evidence of land banking
Sir Oliver’s interim report had found so-called landbanking was not a significant hold-up in creating new homes.
The final report also recommended giving councils a “more muscular role in guiding major homebuilding projects” and the power to purchase undeveloped land for 10 times its existing use value.
The government is now considering the proposals and is due to respond in early 2019.
Last year 217,000 new properties were built.
MP Sir Oliver Letwin said: “I found that the main reason developers are slow to complete building on large sites is that there is only a limited demand each year for the highly uniform properties they are building on those sites.
“My final report sets out some policy levers that government can use to increase the variety of homes on sites, so they can be built out more quickly.”
Secretary of state for housing and communities, James Brokenshire, said: “It is clear action is needed so developers work with us as partners to deliver 300,000 properties a year by the mid 2020s.
“We will consider the recommendations in Sir Oliver’s report to determine next steps to ensure we build the homes our country needs.”