A further 35% rise in property prices by 2020 will lock an entire generation out of the housing market and force them to rent for life.
But an even sharper 39% rise in rents over the same period will make life harder for tenants as well, who will spend more of their disposable income keeping a roof over their heads.
The growing cost of housing will choke off the wider economic recovery by taking money out of people's pockets, according to a new report by the National Housing Federation (NHF).
The country may finally be emerging from recession but the recovery is distorted and both the home ownership and rental markets are "broken", it said.
England meet another 240,000 homes a year just to meet demand, but just 107,000 new homes were built in 2012/13, some 10% less than in 2009.
Rising rents in growth areas such as London are pushing more and more working people over the edge, forcing an extra 310 people every day to claim housing benefit.
Annual spending on housing benefit now totals £24 billion.
David Orr, chief executive of the NHF, said: "A decent job won’t even cover the cost of a home in England. Billions of pounds of taxpayers’ money is wasted, lining the pockets of private landlords, when it could be better spent building more homes people can afford.
"We need to address the problems of the housing market now, before another generation is locked out and reliant on taxpayers to keep the roof over their head."
To fix both England’s housing markets we need to build more homes in areas that are growing economically, and at prices people can afford, Orr said.
Comments