Under 35s made up just 9% of owners in 2016-17, compared to 18% two decades ago, the survey showed.
Overall 63% of all households owned their home outright or with a mortgage in 2016-17.
Peak ownership was in 2003, when 71% of households owned outright or with a mortgage, but the rate of owners has remained steady since 2013-14.
However, the amount of households owning their home outright has increased to 34%, compared to 28% of mortgagors. Before 2013-14 more owners were mortgagors.
The report said: “The increase in the number and proportion of outright owners can be partly explained by the population ageing, with large numbers of baby boomers reaching retirement age, paying off their mortgages and moving into outright ownership.
“At the same time, rising costs have meant fewer new mortgagor households coming into the sector.”
Rental sector doubles
The survey also showed the private rented sector accounted for 20% of households in England in 2016-17 – double the amount in 1996-97.
The overall size of the private rented sector has increased over this time from 2.1m households to 4.7m households.
There were more than three times as many 35-44 year olds renting privately in 2016-17 than 20 years ago, an increase from 331,000 households to 1.1m.
Homeowners are more likely to be in higher income groups than renters, according to the survey.
Mortgagors typically spent 19% of joint income on their mortgage, compared to privately renting households spending 46% of income on their rent.
Kate Davies, executive director at the Intermediary Mortgage Lenders Association (IMLA) said: “This survey is a stark illustration of the state of the English housing market.
“In just ten years, we have witnessed a step-change in the market as the shifting demographics of homeownership and the housing supply shortage redefine what has previously been considered the norm.
“While the housing market and the availability of mortgage finance has improved significantly over the last decade, stricter affordability rules are limiting activity by those who would otherwise be highly leveraged.
“Coupled with a dearth in housing supply, it means more younger Britons are stuck in the rental sector.”