New build homes are unaffordable to more than 80% of working families across England, research claims.
Housing charity shelter said even with the Government's Help to Buy loan scheme - which only requires a 5% deposit - most were still priced out.
The West Midlands is the least affordable region with 93% of privately renting families struggling to get on the property ladder, the charity found.
Shelter claim the current "speculative" way housebuilding works has resulted in a conflict of interests and a highly combative local planning process.
Instead, the charity wants to see a "new civic housebuilding" system introduced to support the building of new, affordable high quality homes, with greater powers for local authorities over land in their area.
Under Shelter's proposed initiative, landowners could choose to sell at reasonable prices, or invest their land as equity and own shares in a development, taking long-term returns and a share of the profit.
The charity said civic housebuilding that met the needs of communities was used to deliver the Georgian "new towns" of Edinburgh and Bath, the Edwardian garden cities and the post-war new towns.
Graeme Brown, Shelter's interim chief executive, said families had given up on the idea of home ownership in a system that was "rigged".
He said: "The current way of building homes has had its day and it has failed the nation."
The Government recently launched a white paper to boost housebuilding and fix the "broken" housing market.
Under the reforms, every local area will need to produce plans to make sure enough land is released in areas where people want to live.
A Department for Communities and Local Government (DCLG) spokesman said: "This Government has got the country building again with the highest number of housing starts for nearly a decade.
"But we agree with Shelter that the housing market in this country is broken, which is why last month, in a housing white paper, this Government set out bold and lasting reforms to fix it.
"Our reforms will help build more affordable homes, more quickly, for those currently locked out of the market."