The Intergenerational Foundation (IF) has called for tax breaks to persuade older people to downsize, a move aimed at freeing up 25 million unused bedrooms in England for the young people.
The campaign group suggested the coalition government to replace council tax with "a proper land tax, to reflect the social cost of occupying housing, particularly housing that is larger than one's needs".
According to the document, while young people face a housing shortage, 37% of homes in England are "under-occupied", meaning they have at least two bedrooms more than they require.
“Those who need property the least are now the group that holds the most. As housing wealth shifts irresistibly up the demographic scale, the 'family home' is increasingly in the hands of an ageing population that is no longer actively raising Britain's families,” said the report entitled Hoarding of Housing, which was published by the foundation.
However, Housing Minister Grant Shapps said, "Whilst this report makes interesting reading, we do not agree that people should be taxed or bullied out of their homes. Instead we will work with families to ensure that housing becomes more affordable over time."
He further added that £13 million was being provided to councils to help tenants move from larger to smaller homes.
In addition, the report suggested encouraging older people to downsize by moving to smaller homes, following the English Housing Survey figures showing that home ownership among under-35s is falling.
"It is perfectly understandable that retired people cling to their home long after it has outlived its usefulness as a place to bring up a family in," the document co-author author Matthew Griffiths said.
"But there are profound social consequences of their actions which are now causing real problems in a country where new house-building is almost non-existent."
The IF is a group formed by Ashley Seager, a former journalist on the Guardian newspaper, and Angus Hanton, an entrepreneur. It is set up to campaign for younger people's financial issues including job prospects and affordable housing.