The professional services network estimated that a quarter of the population will be in the private rental sector by 2025, taking the number to 7.2 million households.
The proportion of owner occupiers will decline from a peak of 70% in the mid-2000s to 60% in 2025.
Half of under-40s will be renting privately by 2025 as house prices continue to rise, the report predicted.
PwC estimated that within five years average house prices will reach £360,000 after growing by 5% every year.
Richard Snook, senior economist at PwC, said: “Driven by a decade of soaring house prices pre-crisis and lower loan-to-value ratios post-crisis, the deposits needed by first time buyers have risen significantly.
“As a result, a generation of private renters have emerged and this will increasingly be the norm for the 20-39 age group.
“There is also a rising dichotomy in the market between those (mostly older) households who own outright and those (mostly younger) households who still have a mortgage or rent to pay.”
More people are set to own their homes without a mortgage, as the report said almost 35% of homeowners will do so in 2025.
John Hawksworth, chief economist at PwC, added: “In the long run, a large and sustained increase in affordable housing supply will be required to meet the needs of a UK population that is growing relatively rapidly by European standards.
“This could involve a range of measures including further planning reform, action to address skills shortages in the housebuilding sector and enhanced financial incentives to build more homes.
“But cuts to social rents announced in the budget will tend to work against this for local authorities and housing associations, while private developers may be cautious about expanding too rapidly.
“So we expect housing supply shortages to persist for at least the next decade and realistically expect to see a continuing rise in Generation Rent until at least 2025.”
