A GENERATION of young people face the prospect of never owning their own home, according to a new report.

The Resolution Foundation – a think-tank focused on low- and middle-income families – said a third of millennials could still be renting by the time they claim their pensions.

It called for radical reform of the private rented sector, including tying rent increases to inflation for existing tenants in order to keep prices down.

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Lindsay Judge, senior policy analyst at the Foundation, said Britain’s housing problem had developed into a “full-blown crisis”, with young people bearing the brunt.

She said millennials now spent a record share of their income on housing – in return for living in smaller, rented accommodation.

She added: “While there have been some steps recently to support housebuilding and first time buyers, up to a third of millennials still face the prospect of renting from cradle to grave.

“If we want to tackle Britain’s ‘here and now’ housing crisis we have to improve conditions for the millions of families living in private rented accommodation.

“That means raising standards and reducing the risks associating with renting through tenancy reform and light-touch rent stabilisation.”

The Resolution Foundation said there had been a boom in private renting, with four in ten millennials – roughly defined as those born between 1980 and 2000 – living in rented accommodation at the age of 30 across the UK. This is four times the rate of their baby boomer parents at the same age.

If home ownership growth follows the weak pattern of the 2000s, the think-tank argues, then up to half of millennials will be renting in their 40s. A third could still be renting by the time they claim their pensions.

Meanwhile, 29 per cent of millennials still share a home either with their parents or flatmates at the age of 30. Previous studies have documented the rise of the flatshare, satirised in the hit 80s sitcom The Young Ones.

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The Foundation said the hike in retiree renters – combined with an ageing population – could more than double the housing benefit bill for pensioners to £16 billion by 2060.

It called on the rest of the UK to follow Scotland’s lead by ushering in an end to fixed-term rentals, making leases open-ended.

Changes brought into force in Scotland last year gave tenants greater protections, ensuring rent increases can only be made every 12 months. A specialist tribunal was also set up, providing a route for landlords and tenants to settle disputes.

A record 1.8 million families with children rent privately across the UK, up from just 600,000 15 years ago. Despite the barriers, as many as 65 per cent of young people still aspire to buy their own home.

Scottish Labour’s housing spokeswoman Pauline McNeill said the new report “will come as no surprise to the thousands of young people unable to get a foot on the housing ladder”.

She said: “For this reason alone housing has to be at the top of the policy agenda and young people should not be allowed to lose out.”

Scottish Labour wants to introduce new laws to control rents in a bid to end the housing crisis. This would see rents linked to average wages, with tenants given the power to challenge unfair charges.

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Ms McNeill added: “Too many people on lower incomes are caught in a vicious cycle – they can’t afford a deposit or access social housing so they rent while they save money but the rent is so high they can never put the money away. That is unacceptable.”

A Scottish Government spokesman said: “This report notes that Scotland has taken the lead in this area within the UK, with the introduction of the new private residential tenancy, which is the most significant change in private renting in Scotland for almost 30 years.

“It means landlords cannot evict a tenant simply because their tenancy agreement has reached its end date, limits rent increases to once in 12 months and establishes a process by which unfair increases can be challenged.”