The report, Out of Thin Air, by engineering consultancy WSP, says that London needs 50,000 new homes every year until 2025 just to keep up with housing demand.
It says that this demand could be met if apartment blocks were constructed directly above rail, Overground and Underground lines.
"This number refers to construction directly above rail lines, but could increase even further if it unlocks and connects to further developments adjacent to rail lines or above a station", the report says.
Research from the report identified all rail tracks in Transport for London’s (TfL) fare zones one-six where there were no breaks in the track made by tunnels, roads or bridges and where there was ten metres of available land on both sides.
This would allow for the development of 100 square metre apartments in buildings rising to 12 storeys.
The report says that the London boroughs of Brent, Ealing and Croydon and TfL Zones two, three and four provided the most ‘overbuild’ development potential.
Bill Price, WSP director, said: "The air rights above rail tracks present an unrealised but significant opportunity to build more new homes on brownfield land.
"There is a wider point about how we can better connect communities and unlock new homes not just above rail lines but adjacent to them as well. In some parts of London rail lines act as accidental segregators.
"By ‘decking’ over these lines, such as the proposed regeneration west of Earls Court underground station, we can join together sites to unlock an even higher number of new homes and create new vibrant communities."