House prices in England are so inflated compared to wages that a “lost generation” has given up on the prospect of ever owning a home.
New research reveals that the lack of affordable houses has led to more than 4 million young adults abandoning dreams of property ownership, with 1.8 million of these aged between 25 and 44.
The discrepancy between prices and wages has widened to such an extent that average earners would have to double their salary to afford a property in their area, with some needing an increase of £100,000 a year just to get on the first rung of the property ladder.
The survey has led campaigners to call on the government to build new affordable housing, with experts warning a "serious social implications" should an increasing numbers of adults be forced to continue to live in the childhood bedrooms of their parents' houses.
Campbell Robb, chief executive of housing and homelessness charity Shelter, said: "When you'd need to more than double your salary just to keep up with rising house prices, it is no surprise that the dream of a home of their own is slipping further out of reach for a generation.
"Politicians need to start meeting people halfway by committing to bold solutions that will get more affordable homes built. Otherwise future generations will find themselves priced out of a stable home, however hard they work or save. The reality is that successive governments have failed to build the affordable homes that this country needs, and as a result our housing shortage has reached crisis point.
"Despite the fanfare surrounding Help to Buy, pumping money into mortgage guarantee schemes is not the solution. This further inflates prices by increasing demand for an already limited number of homes, and will only make things worse for the next generation of first time buyers. The only solution is to build more affordable homes."
A study carried out by Shelter compared average earnings and house prices between 1997 and 2012, finding that average earners would need a £29,000 pay rise to keep up with soaring house prices, while those in gentrified suburbs of London, such as the borough of Hackney, would need to increase their earnings by more than £100,000 to be in line with the "astronomical" rise in house prices.
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The study also found that there is not a single area in England where wage and house price inflation had remained aligned over that 15-year period. People on average wages in Watford and Brighton & Hove would need an extra £47,000 each year to keep up with local house price inflation, and in Manchester £34,000 extra would be required.
Although Burnley in Lancashire had the smallest gap, £10,000 would still needed to be added onto the average salary there to put it in line with the rise in house prices. The Castle Trust, an equity loans and property investment provider, warned that its own research showed that over the past 30 years the average cost of a home for first time buyers had increased by 480%.
The results of a poll of people 2,034 conducted by ICM on its behalf discovered that 27% of adults surveyed had given up on ever getting on the property ladder, including 28% of people aged 25 to 44.
The poll also found that just one in seven adults (14%) not currently on the property ladder thought they would be able to buy a home before they are 30. More than half of people struggling to get on the property ladder (53%) found that raising a deposit was the main problem, according to the poll.
Up to 38% said they did not earn enough to own a house and a further 21% believe they would not be able to keep up with mortgage payments. And one fifth (20%) said that they would be unable to buy their own home because their credit rating was not good enough to qualify for a mortgage.
With such a bleak outlook, respondents said they were hoping to be able to borrow from parents (12%), grandparents (5%) or receive an inheritance (9%).
Sean Oldfield, chief executive officer at Castle Trust, said: "The failure of the young to break into the housing market has some very serious social implications. Older generations know this and want to help - many have the resources to do so."
On Monday, it was reported that a tiny flat in London's ultra luxurious Mayfair has gone on sale for £1 million.Suggest a correction