David Boyle, a government adviser and fellow of the New Economics Foundation think tank, said that youngsters can no longer expect the same level of affluence as their parents.
Speaking at the Hay Festival he warned that Britain will be left with a "tiny elite and a huge sprawling proletariat" who have no chance of "clawing their way out of a hand-to-mouth existence".
He predicted that the average house price will reach £1.2 million by 2045, putting a home beyond the range of most people as wages fail to keep up with huge increases.
Mr Boyle said that the traditional middle classes will need three or four jobs just to be able to pay soaring rents. People will no longer have the space or time to pursue cultural interested.
And he blamed bankers bonuses for artificially inflating the property market.
“The really scary thing is if in the next 30 years house prices rise as much as they have done in the last 30 years then the average house in Britain will cost £1.2 million,” he said.
“We cheered the rise of property prices not realising that it would destroy, if not our own lives, but the lives of our children.
“The place where this is heading is a strange society with a tiny elite and a long struggling, straggling line which is the rest of us, a new proletariat, who will be in hock to Landlord PLC.
"We won’t own our own homes, we won’t be able to afford it.
“It will constrain our dreams and constrain the dreams of our children. It’s a new kind of economy where there are no middle classes at all.
“Nobody in society will have the kind of space in their lives, space in their homes, space in their careers for any kind of culture at all, because we will be having three or four jobs to make ends meet.
“I think it will impoverish society, make it more intolerant and make it more difficult to live.”
Mr Boyle claimed that one of the major problems was Margaret Thatcher abandoning the Supplementary Special Deposit Scheme, known as the "corset" which limited how much banks could lend for mortgages.
Although the scheme kept house prices low in the 1970s, Boyle said it was unlikely that today’s buyers would accept having to wait for months for a mortgage.
Instead, he suggests a "parallel" housing market were new homes were sold at the initial price for 100 years.
He predicted that without such a radical solution, mortgages will be inherited and only be paid off by the grandchildren of the original buyer.
“We were rationing mortgages in the 1970s, that’s what kept prices low and I don’t know if we will accept a time again when you have to wait,” he said.
Mr Boyle said the rise in Ukip was fuelled by disaffection of the middle classes.
“You saw this huge revolt. I think what happens when you suppress the dreams of the middle classes is you get rather peculiar and very dangerous political movements beginning to emerge,” he said.
“That doesn’t forgive people voting in the neo-facists but it does somehow explain it.
“Very unequal societies are very inflationary societies and in the end it drives out those other degrees in society until it becomes very flat and very desperate.
“The middle classes have to wake up to prevent it happening and to create a political movement that will do it. I don’t think Ukip is it.
“You could say that it doesn’t matter and that a more classless society would be a good thing.
“I think if there is no place in the middle that anywhere can go to claw their way out of desperate hand to mouth existence, and the precariat, then that condemns us all to a precarious existence because there is no ladder.”
Mr Boyle sits on the Liberal Democrats’ federal policy committee and was commissioned to write a report into access to public services by the Government, which was published last year.
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'Meet Freddy Bilderberg' X art by WB7
And he blamed bankers bonuses for artificially inflating the property market.
“The really scary thing is if in the next 30 years house prices rise as much as they have done in the last 30 years then the average house in Britain will cost £1.2 million,” he said.
“We cheered the rise of property prices not realising that it would destroy, if not our own lives, but the lives of our children.
“The place where this is heading is a strange society with a tiny elite and a long struggling, straggling line which is the rest of us, a new proletariat, who will be in hock to Landlord PLC.
"We won’t own our own homes, we won’t be able to afford it.
“It will constrain our dreams and constrain the dreams of our children. It’s a new kind of economy where there are no middle classes at all.
“Nobody in society will have the kind of space in their lives, space in their homes, space in their careers for any kind of culture at all, because we will be having three or four jobs to make ends meet.
“I think it will impoverish society, make it more intolerant and make it more difficult to live.”
Mr Boyle claimed that one of the major problems was Margaret Thatcher abandoning the Supplementary Special Deposit Scheme, known as the "corset" which limited how much banks could lend for mortgages.
Although the scheme kept house prices low in the 1970s, Boyle said it was unlikely that today’s buyers would accept having to wait for months for a mortgage.
Instead, he suggests a "parallel" housing market were new homes were sold at the initial price for 100 years.
He predicted that without such a radical solution, mortgages will be inherited and only be paid off by the grandchildren of the original buyer.
“We were rationing mortgages in the 1970s, that’s what kept prices low and I don’t know if we will accept a time again when you have to wait,” he said.
Mr Boyle said the rise in Ukip was fuelled by disaffection of the middle classes.
“You saw this huge revolt. I think what happens when you suppress the dreams of the middle classes is you get rather peculiar and very dangerous political movements beginning to emerge,” he said.
“That doesn’t forgive people voting in the neo-facists but it does somehow explain it.
“Very unequal societies are very inflationary societies and in the end it drives out those other degrees in society until it becomes very flat and very desperate.
“The middle classes have to wake up to prevent it happening and to create a political movement that will do it. I don’t think Ukip is it.
“You could say that it doesn’t matter and that a more classless society would be a good thing.
“I think if there is no place in the middle that anywhere can go to claw their way out of desperate hand to mouth existence, and the precariat, then that condemns us all to a precarious existence because there is no ladder.”
Mr Boyle sits on the Liberal Democrats’ federal policy committee and was commissioned to write a report into access to public services by the Government, which was published last year.
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