A "lost generation" will be pushed out of London because they cannot afford to rent or buy accommodation, a report warned yesterday.

The number of employed people claiming housing benefit in England has risen by 104 per cent since 2009 - a rate of one new claimant every five minutes - because of soaring rents, according to the National Housing Federation (NHF).

Around 310 new claims are added every day at a total cost of more than £12 billion since 2009, said the NHF report Home Truths.

Most of the money is used to pay rent to private landlords.

The NHF called on the government to build more affordable homes in the capital and in other growth areas where the housing market is "overheating."

The report warned that by 2020 house prices in London will have risen a level at which an entire generation will be locked out of home ownership.

It also said that rented property is becoming unaffordable, with rents expected to rise by 39 per cent by the end of the decade. While rents currently take up half of people's disposable income, this is expected to reach 57 per cent within the next 10 years, said the NHF.

NHF chief executive David Orr called for more investment in social housing.

"We hear a lot about 'making work pay,' but a decent job won't even cover the cost of a home in England. Billions of pounds of taxpayers' money is wasted lining the pockets of private landlords."

England needs 240,000 homes a year to meet demand.

However house-building numbers have fallen, with just 107,000 new homes built in 2012/13 - 11 per cent fewer than in 2009.