With each new housing headline, the hearts of young would-be homeowners across the land sink a little.

The latest gloomy prediction emerging from economists this week has the next generation of buyers staring at property prices that will be ten times the size of their salary by 2026.

Conditions for those trying to get a foot on the housing ladder are bad enough at present - news that they are to worsen may cause some to give up the aspiration of home ownership altogether.

That, according to Professor Stephen Nickell, of the newly-formed National Housing and Planning Advice Unit, is bad news for everyone.

In a foreword to a report released this week, the former Bank of England rate setting committee member warned: "Deprivation will increase and the situation will worsen in already deprived areas.

"The economy suffers from the consequent impediments to labour mobility and an increasing quantity of taxpayers' money is required to deal with the social problems generated, both by increasing deprivation and the inability of numerous key workers to find somewhere to live in the area where they work."

Such words may chill the blood, but they should not be dismissed, because the professor has a point.

Unless local and central government seriously raise the number of homes being built, an increasing number of people are going to have to "readjust" their home ownership aspirations or up sticks to find somewhere cheaper to live. Statistics show that, in the past financial year, work started on 173,369 homes in England and Wales.

That sounds impressive, until you realise the latest estimates put the number of new households formed every year for the next two decades at 223,000.

That is a shortfall of nearly 50,000 in the past year alone. If that continues, by 2026 there will be another million families shut out of the property market.

It is a problem the Government is only too aware of.

Prime-minister-in-waiting Gordon Brown acknowledged the "housing problem that we have got to deal with" in his first interviews after Tony Blair announced his departure.

He declared a determination to raise homebuilding to 200,000 annually, and the creation of a number of "eco-towns" to satisfy environmental and housing demands. But even if these targets are met, future househunters could face heartache. The Chancellor's determination to build 200,000 homes would still leave up to half a million new families out in the cold by 2026.

Basic economics suggest that with such a discrepancy between supply and demand, house prices will continue to rise - perhaps reaching the ten times salary predicted by the National Housing and Planning Advice Unit.

Figures released this week showed that more than a third of non-homeowners think they will never be in a position to buy, with a further one in five saying it will take them at least another five years.

Helen Adams, managing director of FirstRungNow.com, said: "The country is going to have to get used to becoming more of a rent-based country."