Middle-earners '˜worst hit by homes squeeze'

The figure is in stark contrast to that of a generation ago, when three in every four middle-income couples were mortgage holders.

Research from the Institute of Financial Studies reveals that adults aged around 30 with average earnings are most likely to be affected by the downturn in expectations – with home ownership rates in that income group now closer to those of poorer families.

Yorkshire is said to be the worst affected region after the prosperous South East, with analysts putting the sharp decline in ownership down to the rapid rise in house prices relative to average incomes.

Andrew Hood, a senior research economist and one of the report’s authors, said: “Home ownership among young adults has collapsed over the past 20 years, particularly for those on middle incomes.”

He said that nationally, “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.”

Mr Hood added: “House prices have risen around seven times faster in real terms than the incomes of young adults over the last two decades.”

The Institute said the most likely victims of the downturn were individuals and couples aged 25 to 34 and earning between £22,000 and £30,000 year between them. A third were university graduates and as many as 60 per cent were parents.