Number of households owned by under 30s drops to 36% says ODPM.

One-third of young people cannot afford to own their own home outright and should be offered shared ownership instead, according to figures released this week.

Statistics released by the ODPM show that the proportion of people in their 30s who are able to afford to buy a home will fall by about one-third by 2026. The number of households owned by people under 30 with mortgages has dropped from 40% to 36% between 2000 and 2004.

Meanwhile, a report by the Joseph Rowntree Foundation says 1.25 million households can pay for a social home but cannot afford to buy even the cheapest property in their area. It found 40% or more of younger working households in 40 local authorities were affected by this problem.

The study concludes that there is a big market for “intermediate” housing market schemes to bridge the divide between social renting and home ownership.

Robert Ashmead, the chief executive of the Home Builders Federation, said: “These figures demonstrate the severity of the affordability crisis. The only long-term answer is better supply.”

The report, which was carried out by Professor Steve Wilcox of York University, also says subsidies for intermediate schemes should not be targeted at households able to afford home ownership if they move.

It says: “Schemes that enable households that could afford to purchase at the lowest end of the market to move into more expensive areas contribute more to meeting household preferences than needs.”

The least affordable areas are Weymouth and Portland, Bournemouth, south Buckinghamshire, Carrick in Cornwall, Kensington and Chelsea in west London, and Harrow, north London.