The era of Britain as a property-owning democracy is over, according to new figures which reveal record numbers of people now forced to rent.
Levels of home ownership have slumped to just 64 per cent, its lowest levels since the mid-1980s when Margaret Thatcher declared her ambition to see more people able to buy a house.
The last decade has instead seen the first rise in the percentage of households renting since 1918, the Office for National Statistics said.
Experts put it down to first-time buyers struggling to get on the ladder as soaring prices have far outpaced incomes.
Generation rent: The Office for National Statistics revealed how the proportion of home owners has fallen in the last decade for the first time in a century
A new study into the way Britain lives reveals the impact of rising house prices and the limited availability of mortgages on those struggling to get on the property ladder.
In 2011, just 64 per cent of the 23.4million households owned their home while the remaining 36 per cent were rented. It is in stark contrast to the 69 per cent who were owner occupiers in 2001.
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In London, 50 per cent of households are renters, the highest in the country according to the Office for National Statistics data.
It marks a reversal in the way Britons live. In 1918 more than three-quarters of households – 77 per cent – rented.
The sharp rise in ownership accelerated from 1953 onwards, with the majority lived in properties they had bought by the early 19710s.
The number of households rose from 2001 to 2011, with the increase entirely driven by people renting their homes
Between 2001 and 2011, the number of households buying their homes through a mortgage fell by 749,000.
The ONS said high house prices, low wage growth and tighter rules imposed by lenders were to blame.
Among the 8.3 million renters in 2011, those renting from private landlords or letting agents were up 1.7 million to 3.6 million compared to 2001, while those socially renting decreased by about 100, 000 to 4.1 million.
All regions in England and Wales had increases in private renters, of which 343,000 were in London, 233,000 in the South East and 209,000 in the North West. Wales and the North East had the lowest increase with about 75,000 and 73,000 households respectively.
Rising house prices, lower wage growth and tighter lending rules have made it harder to get on the property ladder
The ONS said: ‘The rapid increase in the number of households privately renting could be linked to the decline in the number of households getting on the housing ladder, usually through a mortgage.
‘This is mainly because of the increasing difficulty for first time buyers to raise deposits for a mortgage.’
Between 2001 and 2011 the average house price for first time buyers soared by an eye-watering 96 per cent, putting the dream of home ownership out of reach for millions.
The problem was compounded by mortgage firms tightening rules on who they would lend to in the wake of the 2007 financial crash, as the era of near 100 per cent mortgages became a thing of the past.
In 2001 the average house was six times average wages but a decade later it was nine times larger, forcing people to wait longer to save bigger deposits.
Wokingham, Bracknell and Blaby had the highest level proportion of homes bought with a mortgage, while in East Dorset, Eats Devon and North Norfolk almost half of properties are owned outright.
Almost half of homes in East Dorset are owned outright without a mortgage, a breakdown by the ONS revealed