The Institute for Fiscal Studies (IFS) said that those born in the late 1980s had a homeownership rate of 25%, compared with 33% for those born five years earlier (in the early 1980s) and 43% for those born ten years earlier (in the late 1970s).

The falls in homeownership have been sharpest for young adults with middle incomes, it added. In 1995–96, 65% of those aged 25–34 with incomes in the middle 20% for their age owned their own home. Twenty years later, that figure was just 27%.

The IFS said the key reason for the decline is the sharp rise in house prices relative to incomes. Mean house prices were 152% higher in 2015–16 than in 1995–96 after adjusting for inflation. By contrast, the real net family incomes of those aged 25–34 grew by only 22% over the same twenty years.

As a result, the average (median) ratio between the average house price in the region where a young adult lives and their annual net family income doubled from 4 to 8, with all of the increase occurring by 2007–08.

This increase in house prices relative to family incomes fully explains the fall in homeownership for young adults, according to the report. The likelihood of a young adult owning their own home given how their income compares with house prices in their region is little changed from twenty years ago.

But in 2015–16 almost 90% of 25- to 34-year-olds faced average regional house prices of at least four times their income , compared with less than half twenty years earlier. At the same time, 38% faced a house-price-to-income ratio of over 10, compared with just 9% twenty years ago.

Andrew Hood, a senior research economist at the IFS and an author of the report, said: “Home-ownership among young adults has collapsed over the past 20 years, particularly for those on middle incomes – for that group, their chances of owning their own home have fallen from two in three in the mid-1990s to just one in four today.

“The reason for this is that house prices have risen around seven times faster in real terms than the incomes of young adults over the last two decades.”