Housing market concerns as UK set to become a nation of renters

About 77 per cent of people who have not yet got on to the property ladder said they still aspired to buying their own home, but 64 per cent said they thought they had no prospect of ever doing so, according to high street bank Halifax.

Instead, 46 per cent of 20- to 45-year-olds said they thought the country was becoming more like Europe, where renting is seen as the norm, and Britain would be a nation of renters within a generation.

The perception that banks are not lending was seen as one of the biggest problems, with 84 per cent of potential first-time buyers saying banks did not want to advance them money and would find excuses to turn them down.

At the same time, 92 per cent of people said they thought that it was hard for first-time buyers to get a mortgage, 60 per cent of whom thought it was either very hard or virtually impossible. The large deposits required were seen as a further barrier, with only 5 per cent of people saying they were making sacrifices to save for a deposit, while 95 per cent said they either did not have the spare cash to do so, were not interested in setting aside money or had tried to do so but failed.

A further 61 per cent of potential buyers said they were put off getting on to the property ladder by the stress and anxiety involved in applying for a mortgage.

Alison Blackwell, of the National Centre for Social Research, which compiled the report for the Halifax, said: "The phenomenon of Generation Rent could have major socio-economic implications. "It would mean fewer homeowners being able to buy and, therefore, fund the construction of the new homes required in the UK to meet demand, resulting in a slowing-down in the housing market.

"It could open up a widening of the wealth gap that already exists between homeowners and non-homeowners. And people in Generation Rent risk insufficient finances at retirement."