Soaring rents will force nearly 6 million private tenants into poverty by the year 2040, while home ownership and social renting will continue to decline.

The private rented sector will grow to accommodate one in five people in England.

The claims are in a new report from the Joseph Rowntree Foundation, ‘What will the housing market look like in 2040?’

It predicts that today’s five-year-old will be paying private rents 90% higher than at the start of the recession in 2008, with rents rising twice as fast as incomes.

People who rent will be more than twice as likely to be living in poverty than home owners.

The report also predicts that by 2040:

• The average private rent will be £250 per week in real terms, compared with an average of £132 in 2008.
• One in five (10.6m people) will be living in private rented homes, up from 7.2m million. Half of these, 5.7m, will be in poverty (a rise of 2.6m).
• One in ten households will be living in the social housing sector. Social rents will increase 39% to reach £92.10 per week in real terms.
• The housing benefit bill could rise by 125% to £20bn.
• Some 35.3m people will be home owners by 2040, a reduction of 820,000 people from 2008, despite population growth. Real household incomes will grow from £32,300 to £45,500.

Julia Unwin, chief executive at the Joseph Rowntree Foundation, said: “These stark findings are a wake-up call for political leaders.

“After decades of failing to build enough, those in power have a responsibility to act now to build more genuinely affordable homes.

“Without that we are storing up trouble for the future –a price that will be paid by children starting school life this year. These high costs are bad for families, the economy and Government.

“We need a clear strategy that builds the homes we need in the right places and avoids locking low income households out of affordable homes.

“This is about more than frustrated aspirations of home ownership from generation rent: the reality facing many people is a life below the poverty line because of the extortionate cost of keeping a roof over your head.

“Addressing the rising cost of housing is crucial to tackling the high levels of poverty in the UK.”

David Orr, chief executive of the National Housing Federation, said: “Our country is in the depths of a housing crisis so severe that unless we do something about it we won’t be able to house the next generation.

“This isn’t just about house prices. The cost of renting is getting out of control, leaving many people in poverty. If this continues we will see people priced out of both buying and renting and struggling to put a roof over their head.

“With 8m babies born between 2001 and 2012, we really need to ask ourselves, where will our children live when they reach adulthood?”

The report is here