Home-ownership levels among young adults on middle incomes in particular have “collapsed” in the past 20 years.

Those in this bracket now have a one in four chance of being on the property ladder compared with two in three in the mid-1990s, a report has found.

The Institute for Fiscal Studies (IFS) said that, in 1995/96, two in three (65 per cent) of 25 to 34-year-olds on incomes falling into the middle 20 per cent bracket for their age group were home-owners.

But by 2015/16, just one in four (27 per cent) of this group owned their own home.

The IFS said this group of young adults is made up of those with after-tax incomes of between £22,200 and £30,600 per year, including any money coming in from a partner.

A third are university graduates, three-quarters live with a partner and around 60 per cent have children.

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.”

Average house prices were 152 per cent higher in 2015/16 than they were 20 years earlier after adjusting for inflation, the report said.

By contrast, the real net family incomes of those aged 25-34 have increased by only 22 per cent over the same period.

At 27 per cent, the home ownership rate of middle-income young adults in Britain is now closer to those with low incomes than it is to those on high incomes, the IFS found.

In 2015/16, eight per cent of young adults on low incomes were home-owners compared with 64per cent of those with high incomes.

Middle-income young adults had home ownership rates much more similar to high-income young adults 20 years ago.

Young adults today are much less likely to be home-owners than those born just five or 10 years earlier, the report found.

The IFS said 25 per cent of those born in the late 1980s owned their own home at the age of 27, compared with 33 per cent of those born in the early 1980s and 43 per cent of those born in the late 1970s.