One of the country’s top property developers has described the UK’s system of funding social housing as “nuts” and called for higher taxes to speed up building.

Roger Madelin, a member of the executive committee at British Land, told the Guardian the decades-old system of getting private developers to pay for affordable homes was “a stupid way of meeting this social need” and that the government should directly fund them.

“All companies should pay higher corporation tax,” he said. “This country needs to have more tax paid. If we did it like that we could get on and do it. It can’t work in the long term, you can’t expect developers to continue to produce for the population’s social needs at this level. It should come from general taxation.”

Madelin’s suggestion will raise eyebrows in the notoriously profit-driven property industry as it implies increased taxes on its profits. But he is a respected figure who led the regeneration of King’s Cross in London as well as Brindley place in Birmingham and his remarks reflect growing frustration that the system is not only failing to deliver enough cheap housing, it is also a drag on development.

He made his proposal as British Land submitted one of the UK’s largest planning applications for a £3bn regeneration of Surrey Quays in east London, with 3,000 homes, up to six skyscrapers and several new corporate headquarters on a site stretching across 53 acres – similar in size to the regeneration of King’s Cross. It is located about a 20 minutes’ tube journey from the City of London, between Shoreditch and Peckham, two rapidly gentrifying areas, on the London overground line. Some 35,000 people already live in the Rotherhithe peninsula, where the development will take place.

Visualisation of the town square in the Canada Water masterplan. Photograph: British Land

The first part of the planning application submitted on Monday includes 35% affordable homes, in line with the policy of the London borough of Southwark’s policy. 70% of those will be available at the lowest social rent, the rest will be shared ownership. But the volume of affordable homes achieved in planning deals across the country is often significantly lower. Between 1991 and 2011 on average 55% of new affordable supply was built each year, but since 2012, this figure has dropped to 38%, according to figures from the Resolution Foundation. Last year, Sainsbury’s was granted permission to build 683 apartments above a store in Ilford, only 27 which – just 4% – will be affordable.

The total number built, including with state funding, fell from 61,090 in 2011 to 41,530 in 2017.

Madelin believes that by avoiding the current haggling between council officers and developers about how much they should contribute to affordable homes, the government could regain control of how much and when much-needed affordable housing could be built.

“I find it nonsensical that we go through these viability assessments,” he said. ‘If you have a shortage of cars then you wouldn’t get motor manufacturers to subsidise people who can’t afford a decent car.”

The Surrey Quays site is at present occupied by swaths of surface car parking, a 1980s shopping centre and the disused Daily Mail printworks which is currently acting as a 3,000-capacity electronic dance music venue.

The park in the Canada Water/Surrey Quays regeneration masterplan. Photograph: British Land

The planning application features towers rising up to 46 storeys which will have striking views of the Shard, the City and Canary Wharf, all of which are within two miles. Canada Water, an enclosed former dock will be the centre of about 120 acres of open space which will feature walking trails including one, potentially, that winds up and over the exterior of a new entertainment venue. Madelin said he hoped to inspire people to engage in the Italian pastime of “passegiatta” – promenading, a pursuit not normally linked with the Rotherhithe peninsula.

The project is slated to take 10 to 15 years to complete and is being carried out in conjunction with Southwark, which will have a 20% share in the land and can also invest up to 20% in the buildings, Madelin said.