The Bank of England’s decision to raise interest rates to 0.25pc from 0.1pc last Thursday will increase the cost of borrowing and make getting on the ladder harder still.Experts have warned the prospect of spending years renting and being thousands of pounds worse off in retirement than employed people will push more to give up being their own boss.

Rebecca O’Connor of stockbroker Interactive Investor said going self-employed often meant sacrificing a number of “valuable workplace benefits”, such as company pensions, where firms are forced to contribute the equivalent of at least 3pc of a worker’s income to a retirement pot. Employees must pay in 5pc unless they opt out.

“Life insurance, income protection and often health insurance, as well as holidays, paid sick leave and parental leave are all extremely valuable perks of employment,” she added.

Andy Chamberlain of Ipse called on lawmakers to act in order to avoid a crisis, saying if nothing was done it would “derail the self-employed” dream for millions of workers.

“Today’s findings are a wake-up call. If self-employed workers aren’t able to get on the property ladder, then setting up a business could become less desirable altogether,” he said.

Hundreds of thousands have already given up on freelancing, as the above chart shows. There were more than five million self-employed people in Britain before the pandemic, following a decade of growth. Today, there are fewer than 4.3  million and growth has plateaued.

Changes to self-employed tax rules, known as “IR35”, have made it harder for freelancers to find contracts, while the pandemic resulted in self-employed earnings dropping by close to a third on average during the first stages of the crisis. Both have pushed freelancers back to employment, the report said.

Tax rises in April, soaring energy bills and inflation soaring to its highest for 10 years will pile yet further pressure on incomes in the months to come.

In its 2019 Conservative Party manifesto the Government pledged to assess new policies for freelancers, such as making it easier to get mortgages.

In the Budget in spring 2020, it announced the review had been completed and that the Government would finance new loan schemes and consult on support for self-employed parents, alongside a wider review of parental pay and leave. However, these promises are yet to come to fruition.

A Government source said: “I think it’s fair to say that the delivery of some of the measures was superseded by our response to the pandemic, and particularly the Self-Employment Income Support Scheme, under which 10.4  million claims were made totalling £28.1bn.”

Around three million benefited from the emergency state support, but some 1.6 million were deemed to be technically ineligible for help and fell through cracks in the safety net.

Mike Coshott of CMME, a mortgage adviser for the self-employed, said freelancers needed more help, saying “while many have been able to generate regular work post-lockdown”, many were still bearing “financial scars”.