The ageing population means demand for the single storey dwellings is at an all time high, particularly for those worried about mobility up and down stairs as they get older.
But a shortage of available land has seen housebuilders concentrate on apartment blocks and flats in the private sector in recent years instead.
More than half the nation's over-65s (54 percent) are considering a bungalow as their next and potentially final property move, said housebuilders McCarthy and Stone.
That equates to 6.6 million older adults.
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As the UK rapidly ages, more and more people want to downsize from their large family homes to a bungalow, which is smaller, easier to maintain and offers independent living
However, there are an estimated two million bungalows in Britain and only a paltry 2,600 were built last year, said the developer, particularly those aimed on estates specifically geared for retirement living.
This is down from 26,000 built in 1986 with both private developers and local authorities concentrating on traditional houses or flats in the past three decades.
Council planning departments, under pressure to build more accommodation per square foot are more likely to approve high rise blocks than single storey lone dwellings.
Clive Fenton, the Chief Executive of McCarthy & Stone, said: "There is an urgent need to build more suitable housing to meet the different needs of those in retirement, and bungalows must play a key role.
"Though they were a dying breed, bungalows are making a comeback and are hot property.
"As the UK rapidly ages, more and more people want to downsize from their large family homes to a bungalow, which is smaller, easier to maintain and offers independent living.
"In doing so, they free up homes for the UK's younger generation, and also keep older people healthier and happier for longer. It's a win, win for everyone."
Apart from step free access, bungalows also have the advantage of easy to maintain outdoor spaces for retirees who prefer to keep a garden rather than be confined to a flat, he added.
MPs have recently argued for more bungalows and there are reports that the Government will encourage more to be built to cope with demands of an ageing population.