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Amsterdam-style “pop-up” housing could cut the cost of London’s rental market by a third, a report from the London Tories said today.

Factory-assembled units cost half as much to build as traditional methods and can be customised to match the surrounding area.

They are also much quicker to construct meaning savings can be passed on to renters with the result that they can be let well below market rates.

Tory Assembly housing spokesman Andrew Boff described the method as an “untapped goldmine” which would help combat steep rent rises. High quality “pop-up” or modular homes — which can last about 60 years — are also a cheap and flexible option for small developers and self-builders.

Examples in London can be found in Mitcham where apartments were being rented at £148 per week, almost a third less than the local market average of £210. The homes could also help bring into use vacant and under-utilised sites, either on a temporary or permanent basis, according to the report.

The London Land Commission has identified space for 130,000 new homes on public land and there is thought to be potential for at least 10,000 on small disused sites. Mr Boff wants councils to use some of that land now to build “pop-up” homes that are genuinely affordable.

He said: “The standard of pop-up homes has improved beyond recognition in recent years. This realistic and sustainable housing solution is an untapped goldmine. These homes provide a fast, affordable solution that could help drive down the price of building and, subsequently, renting in London.”

Modular housing is used in the Netherlands to address the dual problems of developing unattractive sites and the affordability of homes for graduates, who often earn too much to qualify for social housing but too little to afford city rental prices.

One developer cited in the report, Vanbrugh, compared 32 traditionally-built homes taking more than 16 months and £2.2 million to complete, with 32 modular homes taking just six months and £1.8 million.