Nearly half of potential homebuyers believe the UK will become a nation of renters within a generation as young people are set to be frozen out of the housing market.

A study by Britain's biggest mortgage lender, Halifax, showed that young people have now given up the dream of owning their own home and are now resigned to the fact that they will have to rent for the rest of their lives because they cannot save whilst they are paying rent.

In a survey of 20-45 year olds, 46 per cent said they thought the country was getting more like Europe, where renting is the norm. Whilst 77 per cent said that they still want to be able to afford their own home, nearly 65 per cent said they thought that they probably haven't got a chance of doing so.

The main problems that emerged form the survey was the amont of money needed to save up for a deposit and the fact that banks are now reluctant to lend.

Alison Blackwell, of the National Centre for Social Research, who compiled the report, said: "The phenomenon of Generation Rent could have major socio-economic implications. It would mean fewer homeowners being able to buy and therefore fund the construction of the new homes required in the UK to meet demand, resulting in a slowing-down in the housing market."