House prices will rise 50 per cent to an average of more than £400,000 within the next 10 years, according to a new forecast.

It means buyers will need a £100,000 deposit if they want to secure the more attractive mortgage rates for those with a larger deposit - and be earning an annual salary of almost £70,000.

The housing report suggests average prices will rise from their current level of £280,000 to £419,000 by 2025. For those in London, values will increase from £515,000 today to almost £1m at £931,000.

Average prices are predicted to rise from their current level of £280,000 to £419,000 by 2025

Annual percentage growth in UK house prices

The report by the Association of Residential Letting Agents and the National Association of Estate Agents also predicted that the percentage of the workers who own their own home will drop from 62 per cent to 55 per cent in the next 10 years.

It blamed a host of factors, including low wages, tighter lending criteria and a shortage of affordable properties. It said the drop would boost demand for rental properties, with the percentage of private renters increasing from 20 to 29 by 2025.

Alex Gosling, chief executive of estate agents HouseSimple.com, said: 'If house prices really do reach those levels by 2025, it's hard to see how any first-time buyers will be able to afford to climb onto the property ladder.

First-time buyer Macca Sherifi agreed, saying: 'I'd love to be able to afford to buy my own home. But at this rate, I'm going to have to live abroad.'

The report predicted rents will climb in the same period by 27 per cent from £134 to £171 a week. Those renting in London will be worse off in 2025 as rents will increase 34 per cent from £234 to £314 a week.

Average weekly rents across the regions

David Cox, managing director of ARLA, said 'Buying and renting a home is a giant step, and is out of reach for many. Rent costs are already growing at a rate that people are struggling to keep up with, and they're due to become even less sustainable over the next decade – particularly when the new landlord tax sets in, which will put off many would-be landlords from entering the market. If we're to see the property market lifted out of its current state, we need to help the rental market from top down as well as bottom up, ensuring landlords are not penalised for their choice of income, and they can in turn give tenants the best possible price and service they deserve.'

The Chancellor has introduced a number of changes to the buy-to-let market, including a reduction in the tax relief that landlords can claim on their rental income, and an increase stamp duty charge of 3 per cent on those buying a second home.

Mark Hayward, managing director of the NAEA, said: 'House prices are only going to go one way, and unfortunately that is up. For so many already priced out of the market, this is news aspiring house buyers will not want to hear. Ongoing house price inflation, combined with low wage inflation, tighter lending restrictions and a shortage of affordable housing, means owning a home will continue to be distant dream for many. Increased rental costs will also make it more difficult for current renters to save for a house deposit as much of their income will be eaten up in rent.'

Rob Weaver, director of investments, property crowdfunding platform Property Partner, said: 'With house prices set to rise further, even more strain will be put on the rental market as people are forced to rent longer before they can buy.

'We need more high quality rental properties because right now demand is massively outstripping supply and that is only likely to get worse.