The charity says that a third of all working households with occupants under 40 cannot afford a home as prices rise and savings are hit by mounting bills and debt repayments.
“Our analysis points to worrying prospects for those on middle incomes and below,” said Guy Palmer, co-author of the foundation’s Housing and Neighbourhoods Monitor report.
“The most pressing policy challenges concern increasing affordability for first-time buyers and ensuring housing is available for those on low incomes.”
Earlier reports also claim of a worrying trend in lack of affordability as debt eats into disposable incomes, making many first-time buyers reliant on parents for funds for a house.
Even if they do get a home, they could soon lose it without proper debt management as last month the Council for Mortgage Lenders said that repossession figures were the highest for five years.
Although the government responded on BBC Radio Four’s Today programme by saying that it was acting to address the lack of affordable housing, Mr Palmer said that there is more it can do.