The Review, commissioned by the Chartered Institute of Housing (CIH) and the Building Societies Association (BSA) saw narrowing affordability pushing more and more first-timers off the housing ladder and back into private rented accommodation.
Currently, around 35 per cent of first-timer buyers' income is devoted to covering mortgage costs. This compares with the peak of 34 per cent seen back in 1990 in the midst of the housing boom.
By contrast, private rents have kept pace with earnings, resulting in substantially lower rents than mortgage costs (around 64 per cent) on equivalent properties.
The Review's author, Steve Wilcox, professor of housing policy at the University of York said: "Private renting has become far more competitive as an option for households compared to the cost of buying; the sector has grown by 21 per cent in the last five years across the UK and is fulfilling a significant role in the housing market.
"With the rates of population and household growth outstripping current and planned new house building we are likely to see continuing growth of the private rented sector."
CIH Head of Policy Merron Simpson stressed, however, that an increase in the quality of private rented housing needs to go hand in hand with the increase in volume.
She said that the finding's from Housing Minister Yvette Cooper's review of private rented housing would be key.
