The report revealed that 1 in 7 local authorities have seen rent rise by than £500 a year in the past year and six areas have seen increases in excess of £1,500.
As a result, 72% of renters say they are only able to put aside £50 a month or less in savings while 58% report being unable to save anything at all.
Stephen Smith, director of housing & external affairs at Legal & General Network, said: "This report by Shelter brings to life what we are seeing in the national statistics on housing tenure, with owner occupation in decline from its high level of the last three decades and the growth of private renting.
“But two factors are making this trend a difficult one for those in the private rented sector. First the rise in rent levels - a function of supply and demand imbalance; and second the impact of the very flexibility that short term tenancies deliver - that is, potential instability in family life.
“Before both these issues get out of hand parties from across the industry should be developing solutions to ensure there are not insurmountable barriers between tenure so that people can move to the most appropriate tenure for their needs over their lifetime and not become trapped in one tenure or another."
Campbell Robb, chief executive of Shelter, added: “Unless something changes the chances of the next generation getting a home to call their own look increasingly bleak. The Government needs to show young people and families exactly how it plans to dismantle the rent trap for good.”