The charity has developed a 'Living Home Standard', which looks at factors including living conditions, space, affordability, stability and neighbourhood.
After months of consultation with the public, the survey, supported by Ipsos MORI, found that 43% of all homes do not meet the guideline.
Each of the five elements within the survey is measured according to certain criteria – for example, the essentials for decent 'living conditions' include the ability to heat a home safely and effectively and freedom from pests, mould and damp.
Owner of green energy company Noreus, Ron Fox, said: "While the results of this survey are shocking, they are not surprising.
"The research has collected results from nearly 2000 adults from across the country and it seems that people in the rented sector are particularly vulnerable – although there are measures landlords can immediately take to improve the homes they let out to tenants."
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Shelter has now called on the Government to increase the number of homes that meet the Living Home Standard.
A spokesperson for the Department for Communities and Local Government spokesman told the BBC: "Good quality housing is an absolute priority for this Government and more than a million sub-standard properties have been brought up to standard since 2010.
"We've also set out the most ambitious vision for housing in a generation, doubling the affordable housing budget to £8 billion to deliver 400,000 more quality homes."
Mr Fox added that the Government had already imposed changes to the law which requires landlords to make changes to energy efficiency – meaning that some improvements were on the horizon.
From 01 April 2018, landlords will no longer be able to grant new tenancies or renew an existing tenancy if their property has been given an energy rating of F or G in an Energy Performance Certificate.
Mr Fox said: "If you are renting out your property and want to make changes, now is the time to act. Looking at measures including spray foam insulation to improve energy efficiency and ventilation solutions to combat mould and condensation are vital to improve your tenants' well being.
"Not only will you be creating a more comfortable home for them, but you'll be protecting your investment too. Insulating and ventilating properly is one way to ensure the long-term structural integrity of your property."
For more information, visitwww.noreus.co.uk or call 0845 474 6641
