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Home ownership will fall to its lowest level since the mid-1980s over the next decade, a study has warned.
The National Housing Federation (NHF) said the housing market is "in crisis" and the government must take urgent action to increase the supply of homes.
The study said the number of property owners in England will drop to just 63.8 per cent as house prices soar, compared to 72.5 per cent in 2001.
It predicts that six in every 10 Londoners will live in rented accommodation by 2021, with the number of owner-occupiers falling from 51.6 per cent in 2010 to 44 per cent by 2021.
The Federation, which represents England's housing associations, warns that higher prices and tighter mortgage lending will leave an entire generation squeezed out of the housing market.
The study said the bleak outlook was due to an under-supply of homes in the UK.
The North East will be the only English region to see any increase in owner occupier numbers over the next decade, rising marginally from 66.2 per cent to 67.4 per cent, according to the NHF.
Oxford Economics, who were commissioned to produce forecasts said the average house price in England will increase by 21.3 per cent over the next five years from £214,647 in 2011 to £260,304 in 2016.
NHF chief executive David Orr said: "With home ownership in decline, rents rising rapidly and social housing waiting lists at a record high, it's time to face up to the fact that we have a totally dysfunctional housing market.
"Home ownership is increasingly becoming the preserve of the wealthy and, in parts of the country like London, the very wealthy.
"And for the millions locked out of the property market the options are becoming increasingly limited as demand sends rents rising sharply and social homes waiting lists remain at record levels."
Speaking to Radio 4's Today programme, housing minister Grant Shapps said his plans would "get Britain building again".
He said the trebling of house prices in the 10 years from 1007 has "locked too many out of owning their own home".
"That's why I've announced plans to release thousands of acres of public land for housebuilding.
"And despite the need to tackle the deficit we inherited, this government is putting £4.5bn towards an affordable homes programme which is set to exceed our original expectations and deliver up to 170,000 new homes over the next four years."
Dods Parliamentary Communications Ltd
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