More than three-quarters of young families in Birmingham cannot afford to get on the housing ladder.
Analysis by a Government housing advisory body showed just 22.9 per cent of families under 40 in the city could afford to buy a suitable home.
Typical first-time buyers have also seen average deposits soar from 16 per cent of annual income in 2000 to 64 per cent in 2009.
In addition, the body said affordability had got worse last year as mortgage lenders reduced the loan-to-value ratios – the amount borrowed in relation to the value of a property – they were prepared to lend at.
The study concluded: “During the past decade there has been a deterioration in the affordability of home ownership.”
The Tories said the figures were evidence of Labour’s “complete and utter failure” on housing policy.
Two reports from the National Housing and Planning Advice Unit, an agency created a sponsored by the Department for Communities and Local Government, provide a thorough analysis of housing affordability.
The second study found only 26.1 per cent of families under 40 could afford to buy a three-bedroom house in England in 2008.
But the figure was even lower in Birmingham. By contrast, 40 per cent of young families in Solihull could afford a family home.
Housing charity Shelter described the figures as “shocking”.
Director of policy and campaigns Kay Boycott said: “The housing crisis has finally spiralled out of control.
“Making housing a key election issue is essential if the next generation has any hope of getting a decent affordable home.
“Recent research from Shelter shows that the lack of affordable housing is having a huge impact on every part of our lives.
“One in five young people still live with their parents, 1.5 million grandparents say they are missing out on helping take care of their grandchildren and almost 2.5 million people actively put off having children, all because of high housing costs.
“Today’s shocking figures reinforce the true extent to which housing has become completely unaffordable for most ordinary people.”