"How dull and uninspired the approach to solving the UK's housing problems has become"

Opinion: it's hard to find new examples of housing innovation in London to match the groundbreaking ideas of the 1960s and 70s, says New London Architecture founder Peter Murray, but he believes architects and designers have the power to change that.

In 1972 the late Martin Pawley was invited to speak at a conference on emergency housing in Chile, then governed by the Marxist President Salvador Allende. Pawley, an author and architectural critic, presented a paper about his research on garbage housing and industrial production. His comments were brought to the attention of the president. As a result a meeting was arranged with Allende and the idea of using a redundant Citroen 2CV assembly plant to make prefabricated panels for housing was cooked up. Designs were prepared and received with enthusiasm by the Chilean minister of planning in May 1973. However, before production could start, the Marxist government was ousted in a violent coup by the CIA-backed General Pinochet.

In Chile today, Alejandro Aravena of Elemental part-builds houses for the poor by creating designs that provide a basic structure, allowing the residents to complete the homes themselves.

These very different approaches to new housing reflect two extremes in the strategies to deliver homes for people – the large-scale, top-down prefabricated product and the local community-level process involving the home owner or occupier in varying levels of design and construction. Both approaches challenged the conventions of traditional housing design and involved innovative methods of construction.

I quote these two examples because they reinforce how dull, conventional and uninspired the approach to solving the housing problems in the United Kingdom has become. And it wasn't always like that.

In the post-war period there was a dozen different prefabricated housing systems produced by the car and aircraft industries, many of them lasting much longer than their expected 10 years. Buckminster Fuller's Wichita House and various bungalow designs for the British government, like the Arcon house, used aluminium technology – although none quite matched the elegance and efficiency of Wall Byam's airstream trailer, which every high-tech architect of the period viewed as the epitome of efficient design.

Meanwhile, soldiers returning from the war were encouraged to assist in group-build projects. In the 1960s and 70s the UK was able to build up to 500,000 homes per year in contrast to the measly 220,000 we built in 2014.

At that time there was a flowering of thinking and designs for new housing in the capital. In the public sector, the low-rise high-density schemes designed under Sydney Cook, the borough architect of Camden Council, were revolutionary and remain examples of high quality urban living today. Alexandra Road, Branch Hill, the Brunswick Centre – these developments provide humane living environments and striking architectural forms rarely matched in today's housing supply.

The Greater London Council (dismantled by Margaret Thatcher in 1986, not to be confused with today's Greater London Authority) built houses using the Primary Support Structures and Housing Assembly Kits method, also known as PSSHAK. Developed by Nabeel Hamdi and Nick Wilkinson from their Architectural Association thesis project, PSSHAK allowed the mix of accommodation to be altered to suit specific demands through participatory design methods, with the designer acting as 'skilled enabler' instead of the 'expert architect'. PSSHAK homes consisted of a basic structural shell fitted with all the necessary wires and pipes. Tenants could then design their own interiors and subdivide the space.

Walter Segal designed timber houses of such simple structures that their construction could be undertaken cheaply and quickly by anyone, while Lewisham council provided sites whose tricky topography made it uneconomic for standard public housing schemes.

The Park Road apartments by Farrell and Grimshaw designed in 1968 were a pioneering design with a central core that allowed potential occupiers no less than 73 variations in plan. The flexible layout, owing more to office technology than residential, remains unmatched in its ability to adapt to resident's changing needs and lifestyles. It was delivered by a housing association set up by the architects; by avoiding the developer's overheads a cost saving of 50 per cent on the market price was achieved.

It would be hard to look around London today and find such levels of innovation. The large residential developers deliver standard products in towers or mansion blocks of contemporary design; even the Athlete's Village for the Olympics was a half-hearted simulacrum of the Barcelona grid; we see Boris Johnson's New London Vernacular popping up throughout the metropolis. They are perfectly decent yet they struggle to create a modern version of the Georgian street. As Peter Barber said recently in his lecture at the Royal Academy: "Current planning law makes it difficult to design streets." How ridiculous is that? Who makes these rules and why can't we change them?

As cities around the world continue to grow exponentially both product-driven and process-driven housing have a role to play in delivering homes, although land prices, regulation and policy often mitigates against the self-builder. If this is to change it is perhaps not so much a design issue as one of finance, regulation and planning.

There are some chinks of light – Pocket Housing has been designing smaller homes that make up for the lack of space with really thoughtful design; dRMM has plans to build a floating village at the Royal Docks in East London; construction companies like Laing O'Rourke are developing off-site production technologies; Rogers Stirk Harbour is working with the YMCA to develop affordable starter accommodation for young people. The Y:Cube units are 26-square-metre one-bed studios that arrive on site as self-contained units.

But it's not enough. London needs to build something like 60,000 homes a year yet is currently not delivering half the number required. Land and housing prices are such that young professionals are finding it a struggle to live in the capital while those at the bottom of the housing ladder are being forced out of the city altogether.

That's why the NLA launched its competition for new ideas for housing London, looking for a wide range of ways of solving the problem of land, planning, construction, cost and design. We're working with the Mayor's office so we hope that the best can be taken on board and implemented.

The winner may not be Pawley's dream of homes manufactured in car plants – a Marxist planned economy can deliver that more easily than our laissez-faire, free market – but we hope to put the spotlight on new thinking by designers, architects and economists who have the potential of making real contributions to this seemingly intractable problem. To quote another Communist leader: "Let a hundred flowers blossom."

The New Ideas for Housing London competition closes on Friday.

Peter trained as an architect and was an editor of Building Design and RIBA Journal before starting Blueprint Magazine in 1983. He has a curated a number of major architectural exhibitions and is chairman of the communications consultancy Wordsearch. He is founder of both NLA and the London Festival of Architecture and is author of various architectural books including The Saga of Sydney Opera House and A Passion to Build. He is a visiting professor of IE University in Madrid and Hon. Sec. of the Bedford Park Society.